Jackson Company produces plastic that is used for injection-molding applications such as gears for small motors. In 2016, the first year of operations. Jackson produced 4,100 tons of plastic and sold 3,280 tons. In 2017, the production and sales results were exactly reversed. In each year, the selling price per ton was $2,400, variable manufacturing costs were 17% of the sales price of units produced, variable selling expenses were 11% of the selling price of units sold, fixed manufacturing costs were $3,075.000, and fixed administrative expenses were $500,000. Prepare income statements for each year using variable costing. JACKSON COMPANY Income Statement For the Year Ended December 31, 2016 Variable Costing : Sales Variable Cost of Goods Sold Inventory, January 1 Costs of Goods Manufactured Costs of Goods Available for Sale Inventory, December 31 Variable Cost of Goods Sold Variable Selling Expenses Contribution Margin Fixed Manufacturing Overhead Fixed Administrative Expenses Net Income/Loss) Net Income/(Loss) JACKSON COMPANY Income Statement For the Year Ended December 31, 2017 Variable Costing : Sales Variable Cost of Goods Sold Inventory, January 1 Variable Costs of Goods Manufactured Inventory, December 31 Variable Cost of Goods Sold Variable Selling Expenses Contribution Margin Fixed Manufacturing Overhead Fixed Administrative Expenses Fixed Administrative Expenses Net Income/(Loss) e Textbook and Media Prepare income statements for each year using absorption costing JACKSON COMPANY Income Statement For the Year Ended December 31, 2016 Absorption Costing : Sales Cost of Goods Sold Inventory, January 1 Costs of Goods Manufactured Variable costs of Goods Available for Sale : Inventory, December 31 Variable Cost of Goods Sold Gross Profit Variable Selling Expenses Fixed Administrative Expenses Net Income/(Loss) JACKSON COMPANY Income Statement For the Year Ended December 31, 2017 Absorption Costing : JACKSON COMPANY Income Statement For the Year Ended December 31, 2017 Absorption Costing : Sales Variable Cost of Goods Sold Inventory, January 1 Costs of Goods Manufactured Variable costs of Goods Available for Sale Inventory, December 31 Cost of Goods Sold Gross Profit Variable Selling Expenses Fixed Administrative Expenses Net Income/(Loss) e Textbook and Media Reconcile the differences each year in net income under the two costing approaches 2016 2017 Variable costing net income Net Income LUSS eTextbook and Media Reconcile the differences each year in net income under the two costing approaches. 2016 2017 Variable costing net income Fixed manufacturing overhead expensed with variable costing Less: Fixed manufacturing overhead expensed with absorption costing Difference Absorption costing net income eTextbook and Media