On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January:

	Units
Production	50,000
Sales($18 per unit)	42,000
Inventory, January 31	8,000
Manufacturing costs:
Variable	$575,000
Fixed	80,000
Total	$655,000
Selling and administrative expenses:
Variable	$ 35,000
Fixed	10,500
Total	$ 45,500

Required:

A. Show the income statement using absorption costing.

B. Show the income statement using variable costing.

C. Explain why the profit figure is not the same.