Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May

2020 are as follows:

	A	B	C
1		April	May
2	Unit data:
3	Beginning inventory	0	150
4	Production	500	400
5	Sales	350	520
6	Variable costs:
7	Manufacturing cost per unit produced	$10,000	$10,000
8	Operating (marketing) cost per unit sold	3,000	3,000
9	Fixed costs:
10	Manufacturing costs	$2,000,000	$2,000,000
11	Operating (marketing) costs	600,000	600,000

The selling price per vehicle is $24,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are noprice, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.

1.	Prepare April and May 2020 income statements for Nascar Motors under (a) variable costing and (b) absorption costing.
2.	Prepare a numerical reconciliation and explanation of the difference between operating income for each month under variable costing and absorption costing.