On July 31, the end of the first month of operations, Rhys Company prepared the following income statement, based on the absorption costing concept: $4,440,000 $3,120,000 624,000 Sales (96,000 units) Cost of goods sold: Cost of goods manufactured Less ending inventory (24,000 units) Cost of goods sold Gross profit Selling and administrative expenses Income from operations 2,496,000 $1,944,000 288,000 $1,656,000 a. Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $132,000 and the variable selling and administrative expenses were $115,200. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar Rhys Company Income Statement-Variable Costing For the Month Ended July 31 Sales Variable cost of goods sold: Variable cost of goods manufactured Less ending inventory Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin 1000 DO Fixed costs: Fixed manufacturing costs Fixed selling and administrative expenses I selling Income from operations b. Reconcile the absorption costing income from operations of $1,656,000 with the variable costing income from operation Reconciliation of Absorption and Variable Costing Income Absorption costing income from operations Variable costing income from operations Difference