Prob 28 E'Lonte Company began operations this year Dering this first year, the company prodaced 3000 and sold 250,000 units. Its income statement under absorption costing for this yoar fallows Part 1 ales (250,000 units X:$18 per unit) Cost of goods sold ELONTE COMPANY Variable Costing Inoome Statement 4,500 000 Sales (250,000 x $18) Variable expenses Variable production costs (20,000 x S .,500,000 Variable seling & admin, expenses (250,000 x $4.1,000 Total variable expenses Contribution margin Faxed expenses Fixed manufacturing oosts Fixed selling & administrative expenses 1200,099 Total fixed expenses 4,500,000 beginning inventory Cost of goods manulactured (300,000 units X 57 50 per uni) Cost of goods available for sale... Ending inventory (50,000 x $7.50 250,000 0,000 2,000,000 450,000 Gross marg Selling and administratine expenses Net Income.. Net 350,000 2.00 per 1240 per un Additional Information Direat labor Variable overhead otal variable prodection Selling and administrative expenses consist of$1200,000 inmal fisodexpenses anc S4 per- variable selling and adritistrative expeases b. The company's prodact cost of $7.50 per unit is computed as follow 2.00 per unit Part 2 Direct materials Direct ubor Variable overhead Faxed overhead $2.40 per n Absorption costing income is $75,000 more than variable costing income This is because there are 50,000 units in ending inventory which have $1.50 per unit in fixed overhead attached to them. Under variable costing all of the fixed overhead is expensed. Under absorption costing, only the portion of the fixed overhead attached to the units sold is expensed 1.50 per units) 1. Prepure the company's income statement under variable costing 2 Explain any difference between the compuny's iacome under varable costing (frem part ) d income reported above