1) Prepare the income statement under absorption costing approach for the year ended 30th September, 2020. 2) Prepare the income statement under variable costing approach for the year ended 30th September, 2020. 3) Reconcile the difference between the two approaches. Kathmandu manufactures trendy, moderately priced rain-jackets. As Kathmandu's senior financial analyst, you are asked to recommend a method of inventory valuation. The following details are available for the year ended 30 September, 2020. Beginning inventory on 1st October 2019 Ending inventory on 30th September 2020 Sales made in the year 2020 Variable manufacturing cost per unit produced (including materials) Variable operating costs (marketing-related) per unit sold 100,000 units 50,000 units 400,000 units $6 per unit $2 per unit Fixed manufacturing costs - actual Budgeted fixed manufacturing costs per jacket Fixed operating (marketing-related) costs Selling price to the distributor $1650,000 $5 per unit $1,100,000 $25 per unit Assume that the standard costs per unit are the same units in beginning inventory and goods produced during the year. There are no variances and note that all under- or over-absorbed overheads are adjusted to the cost of goods sold during the year.