During the first month of operations ended July 31, YoSan Inc. manufactured 2,400 flat panel televisions, of which 2,000 were sold. Operating data for the month are summarized as follows:

Sales 2,150,000

Manufacturing cost:

Direct materials 960,000

Direct labor 420,000

Variable manufacturing cost 156,000

Fixed manufacturing cost 288,000 1,824,000

Selling and administrative expense:

Variable 204,000

Fixed 96,000 300,000

1. Prepare an income statement based on the absorption costing concept.

2. Prepare an income statement based on the variable costing concept.

3 Explain the reason for the difference in the amount of income from operations reported in (1) and (2).