During its first month of operations, Hanson Baking Company produced 7,000 cakes of which 6,400 were sold. The following information was taken from the accounting records for the month of July, 2011:

July 20xx

Sales		$128,000
Manufacturing Costs
Direct Materials	$53,900
Direct Labor	25,900
Variable Manufacturing Overhead	14,000
Fixed Manufacturing Overhead	18,200
Selling and Administrative Expenses
Variable	$14,080
Fixed	6,400

During August, Hanson Baking Company produced 5,800 cakes of which 6,400 were sold. The following information was taken from the accounting records for the month August, 2011:

August 20xx

Sales		$128,000
Manufacturing Costs
Direct Materials	$44,660
Direct Labor	21,460
Variable Manufacturing Overhead	11,600
Fixed Manufacturing Overhead	18,200
Selling and Administrative Expenses
Variable	$14,080
Fixed	6,400

Required: - Complete the following using Excel

Prepare an income statement using both Absorption and Variable Costing for the months of May and June.

Compare the net income for May and June under Absorption Costing. Are the amounts different or the same? Explain

Compare the net income for May and June under Variable Costing. Are the amounts different or the same? Explain