The following information relates to Porter Manufacturing for fiscal 2020, the company’s first year of operation: 

Selling price per unit...............................................................$ 150 

Direct material per unit............................................................$ 75 

Direct labor per unit.................................................................$ 30 

Variable manufacturing overhead per unit..............................$ 5 

Variable selling cost per dollar of sales................................$ 0.05 

Annual fixed manufacturing overhead........................$2,750,000 

Annual fixed selling expense........................................$1,500,000 

Annual fixed administrative expense............................$ 900,000 

Units produced...................................................................250,000 

Units sold.............................................................................230,000 

Required 

a. Prepare an income statement using full costing. 

b. Prepare an income statement using variable costing. 

c. Calculate the amount of fixed manufacturing overhead that will be included in ending inventory under full costing and reconcile it to the difference between income computed under variable and full costing