Hanks Company produces a single product. Operating data for the company and its absorption costing income statement for the last year is presented below.

Units in beginning inventory..................................................0

Units produced....................................................................9,000

Units sold.............................................................................8,000

Sales......................................................... .........................$80,000

Less cost of goods sold:

Beginning inventory.............................................. 0

Add cost of goods manufactured..................54,000

Goods available for sale...................................54,000

Less ending inventory........................................6,000

Cost of goods sold.............................................................48,000

Gross margin........................................................................32,000

Less selling and admin. expenses.....................................28,000

Net operating income.........................................................$4,000

Variable manufacturing costs are $4 per unit. Fixed manufacturing overhead totals $18,000 for the year. The fixed manufacturing overhead was applied at a rate of $2 per unit. Variable selling and administrative expenses were $1 per unit sold.

Required new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements.