Exercise 6-12 (Algo) Variable Costing Income Statement; Reconciliation [LO6-2, LO6-3] Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (38, 000 units $44. 60 per unit). Cost of goods sold (38, 000 unite x $24 per unit) Gross margin 11 Selling and administrative expenses Net operating income $1,694,800 912.000 782, 800 475,000 $307,800 The company's selling and administrative expenses consist of $285,000 per year in fixed expenses and $5 per unit sold in variable expenses. The $24 unit product cost given above is computed as follows Direct naterials Direct labor Variable sanufacturing overhead Fixed sanufacturing overhead ($240,000 +48, 000 units) Absorption costing unit product cost $ 11 4 4 5 $24 Required: 1. Redo the company's income statement in the contribution format using variable costing 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating Income on the absorption costing income statement above. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Redo the company's income statement in the contribution format using variable costing. Sales Variable expenses: Whitman Company Variable Costing Income Statement $ 1,694,800 Variable cost of goods sold S 722,000 Variable selling and administrative 190,000 Redo the company's income statement in the contribution format using variable costing. Whitman Company Variable Costing Income Statement Sales $ 1,694,800 Variable expenses: Variable cost of goods sold $ 722,000 Variable selling and administrative 190,000 Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expense Net operating income 912,000 782,800 0 $ 782,800 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Variable costing net operating income Add: Fixed manufacturing overhead cost released from inventory under absorption costing Absorption costing net operating income < Required 1 Required 2> Complete this question by entering your answers in the tabs below. Required 1 Required 2 Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Variable costing net operating income Add: Fixed manufacturing overhead cost released from inventory under absorption costing Absorption costing net operating income < Required 1 Required 2>