Adeline Manufacturing manufactures a single product. Cost, sales, and production information for the company and its single product is as follows: (Click the icon to view the data.) Read the requirements. Requirement 1. Prepare an income statement for the upcoming year using variable costing. More Info Adeline Manufacturing Contribution Margin Income Statement (Variable Costing) For the Year Ended December 31 Sales price per unit $51 Variable manufacturing costs per unit manufactured (DM, DL and variable MOH) $31 Variable operating expenses per unit sold $2 Fixed manufacturing overhead (MOH) in total for the year $210,000 Sales revenue Less: Variable expenses Variable cost of goods sold Variable operating expenses Fixed operating expenses in total for the year $47,000 Contribution margin Less: Fixed expenses Units manufactured during the year 21,000 units Units sold during the year 15,000 units Fixed manufacturing overhead Print Done Operating income Requirement 2. Prepare an income statement for the upcoming year using absorption costing Requirement 2. Prepare an income statement for the upcoming year using absorption costing Adeline Manufacturing Income Statement (Absorption Costing) For the Year Ended December 31 Sales revenue Less: Cost of goods sold Gross profit Less: Requirement 3. What causes the difference in income between the two methods? When inventory levels expense). Under operating income will be greater under absorption costing than it is under variable costing. This is because under fixed MOH is expensed immediately as a period cost (operating fixed MO becomes part of the inventoriable cost of he product, which ISn't expensed as Cost of Goods old unt the inventory 1s sold, leaving a hi her operating income due to less beng expensed