Below is January's financial information EarMarked Inc. which manufactures winter hats with wireless wifi technology.

The company just opened its doors and is in its first month of operations.

Units produced $1,200$

Units sold $950$

Manufacturing costs:

Variable costs per unit:

Direct materials $$4\mathrm{.}10$

Direct labour $$2\mathrm{.}00$

Variable overhead $$2\mathrm{.}40$

Variable selling & administrative expenses $12\%$ of sales

Fixed costs:

Manufacturing overhead $$24,000\mathrm{.}00$

Selling and administrative $$12,000\mathrm{.}00$

The selling price is $$82$ per unit.

Required:

B$.$ Prepare an income statement using variable costing, in good form.

C$.$ Prepare an income statement using absorption costing, in good form.

D$.$ Clearly and concisely explain the cause of the differences in operating results under the two methods.