Absorption and Variable Costing with Over- and Underapplied Overhead Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: Manufacturing costs (per unit): During the year, the company had the following activity: Actual fixed overhead was $13,400 less than budgeted fixed overhead. Budgeted variable overhead was $4,200 less than the actual variable overhead. The company used an expected actual activity level of 10,800 direct labor hours to compute the predetermined overhead rates. Any overhead variances are closed to Cost of Goods Sold. 2. Prepare an absorption-costing income statement. Round your answers to the nearest cent. 3. Prepare a variable-costing income statement. Round your answers to the nearest cent. 4. Reconcile the difference between the two income statements. The absorption costing generates an income $ than variable costing. Absorption and Variable Costing with Over- and Underapplied Overhead Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: Manufacturing costs (per unit): During the year, the company had the following activity: Actual fixed overhead was $13,400 less than budgeted fixed overhead. Budgeted variable overhead was $4,200 less than the actual variable overhead. The company used an expected actual activity level of 10,800 direct labor hours to compute the predetermined overhead rates. Any overhead variances are closed to Cost of Goods Sold. 2. Prepare an absorption-costing income statement. Round your answers to the nearest cent. 3. Prepare a variable-costing income statement. Round your answers to the nearest cent. 4. Reconcile the difference between the two income statements. The absorption costing generates an income $ than variable costing