Requirea: 1. Prepare the company's income statement in the contribution format using variable costing. Whitman Company Variable Costing Income Statement Sales $ 875,000 Variable expenses: 875,000 Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative 160,000 210,000 Fixed selling and administrative 370,000 505,000 Net operating income $ 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement. Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Variable costing net operating income | $ ............................................................. 15,000 20,000 35,000 Absorption costing net operating income Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year appears below: 875,000 Whitman Company Income Statement Sales (35,000 units * $25 per unit) Cost of goods sold (35,000 units * $16 per unit) $r. 560,000 315,000 Gross margin 280,000 Selling and administrative expenses Net operating income $35,000 The company's selling and administrative expenses consist of $210,000 per year in fixed expenses and $2 per unit sold in variable expenses. The $16 per unit product cost given above is computed as follows: OUI Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($160,000 - 40,000 units) Absorption costing unit product cost $16