Oates Company, which has only one product, has provided the following data concerning its most recent month of operations:

	Selling price................................................	$120
	Units in beginning inventory.....................	0
	Units produced..........................................	7,600
	Units sold...................................................	7,400
	Units in ending inventory..........................	200
	Variable costs per unit:
	Direct materials......................................	$15
	Direct labor.............................................	$48
	Variable manufacturing overhead.........	$7
	Variable selling and administrative........	$10
	Fixed costs:
	Fixed manufacturing overhead..............	$228,000
	Fixed selling and administrative.............	$66,600

1. Prepare an income statement for the month using the contribution format and the variable costing method.

2. Prepare an income statement for the month using the absorption costing method.

c. Reconcile the difference in net operating income between a and b.