Quebec Corp. is a manufacturer of specialty in-line skates. The operating results for 2022 are as follows:

Units produced 60,000 pairs

Units sold 54,000 pairs

Selling price $600 per pair

Production information:

Direct materials $3,000,000

Direct labour 2,250,000

Variable manufacturing overhead 1,350,000

Fixed manufacturing overhead 2,400,000 Variable marketing costs 540,000

Fixed marketing costs 600,000

There was no beginning finished goods inventory.

Required: A. Assuming the company uses Throughput costing method: 1. Prepare the Throughput costing income statement for 2022.

2. Reconcile the difference in net income between the Variable costing and Throughput-costing methods.

3. Reconcile the difference in net income between the Absorption costing and Variable-costing methods.

B. Assuming the company uses the budgeted volume of 75,000 pairs to allocate the fixed overhead rate rather than the actual production volume of 60,000 pairs. The company expenses production volume variance to cost of goods sold in the accounting period in which it occurs. Do the following:

1. Prepare the income statement for 2022 under Normal Absorption costing.

2. Reconcile the difference in net income between the Normal Absorption costing and Absorption-costing methods