During the first month of operations ended August 31, Kodiak Fridgeration Company manu- factured 80,000 mini refrigerators, of which 72,000 were sold. Operating data for the month are summarized as follows:

	Sales			107,800,000
	manufacturing costs
		direct materials	6,400,000
		direct labor	1,600,000
		variable mgf OH	1,280,000
		Fixed mfg OH	320,000
	Selling and admin			9,600,000
		variable	1,080,000
		Fixed	180,000
				1,260,000
Prepare an income statement based on the absorption costing concept.
Prepare an income statement based on the variable costing concept.
Explain the reason for the difference in the amount of income from operations reported in (1) and (2).