$9-27.$ ABSORPTION VERSUS VARIABLE COSTING. Horace Company manufactures a professional$-$grade vacuum cleaner and began operations in $2020.$ For $2020.$ Horace budgeted to produce and sell $25,000$ units. The company had no price, spending, or efficiency variances and writes off production$-$volume variance to cost of goods sold. Actual data for $2020$ are as follows:

Required

Prepare a $2020$ income statement for Horace Company using variable costing.

Prepare a $2020$ income statement for Horace Company using absorption costing.

Explain the differences in operating incomes obtained in requirements $1$ and $2.$

Horace's management is considering implementing a bonus for its