Butler Manufacturing produces fireproof data storage containers that sell for $6,000 each. The company has the following cost structure:

Manufacturing Costs:

Direct Materials (per unit) $1000

Direct Labor (per unit) 2000

VMOH (per unit) 500

Total Variable Manufacturing Costs per unit: 3,500

Fixed Manufacturing Overhead per year $2,000,000

Selling & Administrative Costs:

Variable selling cost per dollar of sales $0.10

Fixed selling & administrative costs per year $1,400,000

During 2010, the company produced 2,500 units but only sold 2,000 units.

a. Create a Variable Income Statement

b. Create a Absorption (Full) Income Statement

c. What is the difference between the net income for each statement and reconciled how that difference came about?