Kissimmee Paint Co. reported the following data for the month of July. There were no beginning inventories and all units were completed (no work in process).

Selling and administrative expenses:

Variable????????$2 per unit sold

Fixed????????????.$39,000

In the month of July, 28,000 of the 30,000 units manufactured were sold at a price of $80 per unit.

(a) Prepare a variable costing income statement.

(b) Prepare an absorption costing income statement.

(c) Briefly explain why there is a difference in income from operations between the two methods.

Manufacturing costs: Variable Fixed Total Total Cost $465,000 210,000 $675,000 Number of Units 30,000 30,000 Unit Cost $15.50 7.00 $22.50