Morey Company has just completed its first year of operations. The company's absorption costing income statement for the year appears below: Morey Company Income Statement Sales (41,000 units at $44.60 per unit) Cost of goods sold (41,000 units * $24 per unit) $1,828,600 984,000 Gross margin Selling and administrative expenses 844,600 512,500 Net operating income $ 332,100 The company's selling and administrative expenses consist of $307,500 per year in fixed expenses and $5 per unit sold in variable expenses. The company's $24 per unit product cost given above is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($260,000 = 52,000 units) Absorption costing unit product cost $ 24 Required: 1. Prepare the company's income statement in the contribution format using variable costing. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.) $ Variable Costing Income Statement | Sales Variable expenses: Variable cost of goods sold Variable selling and administrative expenses Contribution margin Fixed expenses: Fixed selling and administrative expenses | Fixed manufacturing overhead 3 567500 Net operating income (loss) $ 277100 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. (Omit the "$" sign in your response.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Variable costing net operating income $ ( Add J:( Fixed manufacturing overhead cost deferred in inventory . 2771 Absorption costing net operating income