It Variable and Absorption Costing Ansara Company had the following abbreviated income statement for the year ended December 31, 20Y2: (in millions) Sales $28,110 Cost of goods sold $23,890 Selling, administrative, and other expenses 2,530 Total expenses $26,420 Income from operations $1,690 Assume that there were $6,180 million fixed manufacturing costs and $1,410 million fixed selling, administrative, and other costs for the year. The finished goods-inventories at the beginning and end of the year from the balance sheet were as follows: January 1 $3,370 million December 31 $3,940 million . Assume that 30% of the beginning and ending inventory consists of fixed costs. Assume work in process and materials inventory were unchanged daring the period. a. Prepare an income statement according to the variable costing concept for Ansara Company for 20Y2 Ansara Company Variable Costing Income Statement For the Year Ended December 31, 20Y2 (in millions) 2. Variable cost of goods sold: Beginning inventory Ch 20 Quiz assignment take frame Fixed costs: b. Explain the difference between the amount of income from operations reported under the absorption costing and variable costing concepts. The income from operations under the variable costing concept be the same as the income from operations under the absorption costing concept when the inventories either increase or decrease during the year. In this case, Ansara's inventory meaning it sold than it produced. As a result, the income from operations under the variable costing concept will be than the income from operations under the absorption costing concept. The reason is because the variable costing concept deduct the fixed costs in the period that they are incurred, regardless of changes in inventory balances. Check My Work a. Prepare an income statement according to the variable costing concept for Ansara Company for 2012. Ansara Company Variable Costing Income Statement For the Year Ended December 31, 2012 (in millions) Variable cost of goods sold: Beginning inventory Fixed costs