Dodner Company uses an absorption costing system in accounting for the single product it manufactures. The following selected data are for the year 2020: Sales (20,000 units) $720,000 Direct materials used $259,200 Direct labor costs $86,400 Variable selling and administrative expenses $43,200 Fixed selling and administrative expenses $144,000 The company produced 24,000 units and sold 20,000 units in 2020. Direct materials and direct labor are variable costs. One unit of direct material goes into each unit of finished goods. Overhead rates are based on a volume of 24,000 units and are $1.08 and $1.44 per unit for variable and fixed overhead, respectively. The ending inventory is 4,000 units of finished goods on hand at the end of 2020. There was no inventory at the beginning of 2020. Required: A. Prepare an income statement for 2020 under variable costing. B. Prepare an income statement for 2020 under absorption costing. A Dodner Company Income Statement--Variable Costing For the Year Ended December 31, 2020 Sales Variable Costs: Cost of goods sold: Direct materials Direct labor Variable manufacturing overhead Total production cost Less: Inventory Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Net Income B Dodner Company Income Statement--Absorption Costing For the Year Ended December 31, 2020 Sales Cost of goods sold: Direct materials Direct labor Manufacturing overhead Total production cost Less: Inventory Gross margin Selling and administrative expenses Net Income