Lantern Family Co., a manufacturer of Halloween and cosplay costumes, has a fiscal year ending October 31. Its costs and sales information for this year are:

Production costs

Direct materials $40 per unit

Direct labor $60 per unit

Overhead costs for the year

Variable overhead $2,100,000

Fixed overhead $8,400,000

Non-production costs for the year

Variable selling and administrative $750,000

Fixed selling and administrative $5,000,000

Production and sales for the year

Units produced 105,000 units

Units sold 75,000 units

Sales price per unit $360 per unit

Requirement: Prepare the Companys income statement using variable costing as of October 31.

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Bonus: If Lantern Family were to prepare an income statement using absorption costing:

A. Net income would be the same as the variable costings net income

B. Net income would be greater than the variable costings net income by $2,400,000.

C. Net income would be less than the variable costings net income by $2,400,000.

D. Net income would be greater than the variable costings net income by $3,360,000.