The following absorption costing income statements and supporting information are available: 2010 2011 Net sales (20,000 units and 22,000 units) Cost of goods sold (a) Volume variance (O and 5,000 units X $4) Gross margin Operating expenses (b) Income before tax $300,000 (140,000) 0 $160,000 (82,500) $ 77,500 $330,000 (154,000) (20,000 $156,000 (88,500) $ 67,500 $ 0 175,000 $175,000 (35,000) $140,000 $ 35,000 140,000 $175,000 (21,000) $154,000 (a) Cost of goods sold Beginning inventory Cost of goods manufactured Goods available for sale Ending inventory Cost of goods sold aCGM 25,000 units X $7 (of which $3 are variable) = $175,000 20,000 units X $7 (of which $3 are variable) = $140,000 25,000 20,000 = 5,000 units; 5,000 X $7 = $35,000 5,000 + 20,000 - 22,000 = 3,000 units; 3,000 X $7 = $21,000 (b) Analysis of operating expenses Variable Fixed Total $ 50,000 32,500 $ 82,500 $ 55,000 33,500 $ 88,500 Requirements Reconcile income for 2010 and 2011 between absorption and variable costing