Mountain Top Manufacturing Company is in the business of manufacturing and selling hiking shoes. The company recently reported the variable operating income from its first two years of operations, 2021 and 2022. Presented below is the income statement for the two years for its Smartrex brand of hiking shoes:

	2021	2022
Sales (at $50 per pair)	$1,000,000	$1,500,000
Cost of goods sold:
Beginning inventory	$0	$170,000
Add cost of goods manufactured (at $34 per unit)	850,000	850,000
Goods available for sale	850,000	1,020,000
Less ending inventory (at $34 per unit)	170,000	0
Cost of goods sold	$680,000	$1,020,000
Gross margin	$320,000	$480,000
Selling and administrative expenses*	310,000	340,000
Operating income (loss)	$10,000	$ 140,000

*$3 per unit variable; $250,000 fixed each year.

The company's $34 unit product cost is computed as follows:

Direct materials	$ 8
Direct Labour	10
Variable manufacturing overhead	2
Fixed manufacturing overhead ($350,000/25,000 units)	14
Total unit product cost	$ 34

Presented below is production and sales data for the two years:

	2021	2022
Units produced	25,000	25,000
Units sold	20,000	30,000

Required:

1. Write a variable costing income statement for each year.
2. Reconcile the absorption costing and variable costing operating income figures for each year.