Consider the following income statements for Nero Company:

Income statement 1

Revenue = 1,800

Direct costs = (300)

Contribution margin = 1,500

Fixed costs = (500)

Operating income = 1,000

Income statement 2

Revenue = 1,400

Direct costs = (200)

Contribution margin = 1,200

Fixed costs = (300)

Operating income = 900

Income statement 3

Revenue = 2,000

Direct costs = (800)

Contribution margin = 1,200

Fixed costs = (400)

Operating income = 800

1. Identify which income statement is prepared using each of the following costing methods:

Absorption costing, Variable costing, and Throughput costing.

2. For each costing method, identify one assumption associated with its use
3. Explain why Nero Company might produce all three types of income statements for the same period.