Navoroli Company began operations on January 5, 2016. Cost and sales information its first two years of operations are summarized below. Manufacturing Costs Production and sales data Direct Materials $75 per unit Units produced, 2016 200,000 Direct Labor $125 per unit Units sold, 2016 140,000 Factory OH costs Units in ending inventory, 60,000 Variable OH $35 per unit Units produced, 2017 80,000 Fixed OH $14,500,000 Units sold, 2017 140,000 Non manufacturing costs Units-ending inventory, 2017. Variable selling expense $10/unit Sales price per unit 600 Fixed selling and admin $8,500,000 Prepare an income statement for the company for 2016 under variable costing. Prepare an income statement for the company for 2016 under absorption costing. Explain the source(s) of the difference in reported income for 2016 under the two costing methods.