Security Technology Incorporated (STI) is a manufacturer of an electronic control system used in the manufacture of certain special- duty auto transmissions used primarily for police and military applications. The part sells for $55 per unit and STI had sales of 24,000 units in the current year, 2021. STI had no inventory on hand at the beginning of 2021 and is projecting sales of 26,000 units in 2022. STI is planning the same production level for 2022 as in 2021, 25,000 units. The variable manufacturing costs for STI are $16, and the variable selling costs are only $0.50 per unit. The fixed manufacturing costs are $200,000 per year, and the fixed selling costs are $500 per year. Required: 1. Prepare an income statement for each year using full costing. 2. Prepare an income statement for each year using variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from the full and variable costing methods. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare an income statement for each year using variable costing. SECURITY TECHNOLOGY INCORPORATED Sales Less: Cost of goods sold Beginning inventory Cost of annde produced Variable Costing Income Statement 2021 $ 1,320,000 $ 0 100 000 2022 $ 16,000 100 0001 $ 1,430,000 < Prev 4 of 7 Next > Required 1 Required 2 Required 3 Prepare an income statement for each year using full costing. SECURITY TECHNOLOGY INCORPORATED Sales Full Costing Income Statement 2021 $ 1,320,000 Less: Cost of goods sold Beginning inventory Cost of goods produced $ 0 600,000 Available for sale Less: Ending inventory Cost of goods sold 600,000 (24,000) Gross margin Less: Selling and administrative costs Variable 12,000 Fixed 500 Operating income (576,000) $ 744,000 2022 $ 1,430,000 $ 24,000 600,000 624,000 0 13,000 500 12,500 $ 731,500 (624,000) $ 806,000 13,500 $ 792,500 Sales Less: Cost of goods sold Beginning inventory Cost of goods produced Available for sale Less: Ending inventory Variable Costing Income Statement 2021 $ 1,320,000 $ 0 400,000 400,000 16,000 Cost of goods sold (384,000) 12,000 Contribution margin Less: Fixed manufacturing costs 2022 $ 16,000 400,000 416,000 0 (416,000) 13,000 $ 1,430,000 396,000 429,000 $ 924,000 $ 1,001,000 200,000 200,000 Less: Selling and administrative costs Fixed 500 Operating income 500 200,500 200,500 $ 723,500 $ 800,500 < Required 1 Required 3 >