Homework help needed

Whitman Company hasjust completed its rst year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income statement: Sales (40,000 units X $43.60 per unit) $1,744,000 Cost of goods sold (40,000 units X $21 per unit) 840,000 Gross margin 904,000 Selling and administrative expenses 460,000 Net operating income 5 444,000 The company's selling and administrative expenses consist of $300,000 per year in xed expenses and $4 per unit sold in variable expenses. The $21 unit product cost given above is computed as follows: Direct materials $ 10 Direct labor 4 Variable manufacturing overhead 3 Fixed manufacturing overhead ($220,000 + 55,000 units) 4 Absorption costing unit: product cost $ 21 I 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. 8 Answer is complete but not entirely correct. 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 0 $1,744,000 0 Variable expenses: 0 Variable cost of goods sold 0 $ 680,000 0 Variable selling and administrative 9 160,000 9 840,000 Contribution margin 0 904,000 Fixed expenses: 0 Fixed manufacturing overhead 0 204,000 9 Fixed selling and administrative expense 0 300,000 a 504,000 Net operating income a $ 400,000 Required 2 > x Answer is complete but not entirely correct. 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 400,000 X Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing 44,000 X Absorption costing net operating income 400,000 X