Alexandra 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. Alexandra Manufacturing Contribution Margin Income Statement (Variable Costing) Sales revenue For the Year Ended December 31 Less: Variable expenses Cost of goods sold 468000 Operating expenses Contribution margin Less: Fixed expenses Fixed manufacturing overhead Fixed operating expenses 240000 48000 180000 Operating income Requirement 2. Prepare an income statement for the upcoming year using absorption costing. Alexandra Manufacturing Income Statement (Absorption Costing) For the Year Ended December 31 Less: Less: Requirement 3. What causes the difference in income between the two methods? More info Sales price per unit $39 Variable manufacturing costs per unit manufactured (DM, DL and variable MOH) $20 Variable operating expenses per unit sold $4 Fixed manufacturing overhead (MOH) in total for the year $128,000 Fixed operating expenses in total for the year $48,000 Units manufactured during the year 16,000 units Units sold during the year 12,000 units Print Done When inventory levels operating income will be greater under absorption costing than it is under variable costing. This is because under part of the inventoriable cost of the product, which isn't expensed (as Cost of Goods Sold) until the inventory is sold, leaving a higher operating income due to less being expensed. fixed MOH is expensed immediately as a period cost (operating expense). Under fixed MOH becomes