Requirement 1. Prepare an income statement for the upcoming year using variable costing. More info - Sales price per unit $47 - Variable manufacturing costs per unit manufactured (DM, DL and variable MOH ) $23 - Variable operating expenses per unit sold $1 - Fixed manufacturing overhead (MOH) in total for the year $322,000 - Fixed operating expenses in total for the year $47,000 - Units manufactured during the year 23,000 units - Units sold during the year 18,000 units Requirement 2. Prepare an income statement for the upcoming year using absorption costing. Requirement 3. What causes the difference in income between the two methods? When inventory levels operating income will be greater under absorption costing than it is under variable costing. This is because under fixed MOH is expensed immediately as a period cost (operating expense). Under fixed MOH becomes part of the