Assumptions:
Annual production in units	300,000
Annual sales	250,000
Selling price per unit	$ 18.00
Full-absorpting cost of manufacturing	$ 7.50
Selling and administrative fixed expense	$ 1,200,000
Selling and administrative variable exp/unit	$ 4.00
E'Lonte Company
Absorption Costing Income Statement
for the period ending December 31, 2019
Sales		$ 4,500,000
Cost of goods sold:
Beginning inventory	$ -
Cost of goods manufactured	2,250,000
Cost of goods available for sale	2,250,000
Ending inventory	375,000
Cost of goods sold		1,875,000
Gross margin		2,625,000
Selling and administrative expenses		2,200,000
Net income		$ 425,000
Full absorption product cost per unit:
Direct materials		$ 2.00
Direct labot		2.40
Variable overhead		1.60
Fixed overhead ($450,000/300,000 units)		1.50
Total absoprotion product cost per unit		$ 7.50
Please note that there are two parts.
Part 1: Prepare a variable contribution margin income statement
Part 2: Explain any differences between the income reported between full-absorption and variable costing