A company produced 80,000 units and sold 75,000 of them at a price of $20 per unit. Manufacturing costs consisted of direct materials of $200,000, direct labor of $320,000, variable manufacturing overhead of $160,000 and fixed manufacturing overhead of $400,000. General and administrative costs totaled $60,000.

a. Calculate the net income using full costing.

b. Calculate the net income using variable costing.