• Prepare income statements using absorption costing and variable costing methods for LMN Corporation using the following data:

  Cost Component	Amount ($)
  Direct Materials	$50,000
  Direct Labor	$30,000
  Manufacturing Overhead	$20,000
  Selling & Admin Costs	$10,000

  Variable Costs	Amount ($)
  Direct Materials	$50,000
  Direct Labor	$30,000
  Variable Overhead	$20,000
  Selling & Admin Costs	$10,000

  Requirements:

  • Prepare income statements using absorption costing and variable costing.
  • Present the statements in a detailed table format.
  • Discuss the differences between the two methods and their impact on reported profits.