The accounting team at Nash is considering its options for reporting performance at the end of this year. Nash specializes in mylar balloons, which it sells for $0.73 each. Nash has used only absorption costing within its standard costing system, but management team members feel uneasy about Nash's most recent year's modest income (despite higher-volume sales than the previous year). They wonder if there is a different way to put the financial statements together that would provide a more consistentand perhaps conservative-presentation of performance. Some people on the accounting team have experience with variable costing, so they suggest putting together a side-by-side comparison of both costing systems for the past two years in order to compare the results. Following are the budgeted costs and budgeted production that were in place for both years, along with actual volume information for each year. Budgeted Information for Both Years Direct materials Direct labor Variable-MOH Variable selling expense Fixed-MOH Fixed selling and administrative expenses Budgeted production volume $0.10 per unit $0.10 per unit $0.05 per unit $0.05 per unit $18,000 $28,700 120,000 units Actual Activity Year 1 Year 2 Units produced 124,400 115,100 Beginning FG Inventory (units) 2,500 9,000 Units sold 117,900 121,000 Present Nash's income statement for both years under variable costing. (List variable expenses before fixed expenses.) Sales Less Variable Expenses COGS Variable Expenses Contribution Margin Less Fixed Expenses Manufacturing Operating Expenses $ Year 1 $ A Operating Income $ $ Year 2