The following absorption income statement and additional data are available from the accounting records of Bernon co. for the month ended May 31, XXXX. During the accounting period, 17,000 units were manufactured and sold at a price of $60 per unit. There were no beginning inventories.

Bernon Co.

Absorption Costing Income Statement

For the Month ended May 31, XXXX

Sales (17,000 @ $60) 1,020,000

Cost of goods sold 612,000

Gross Profit 408,000

Selling and administrative expanses 66,000

Income from operations 342,000

Additional information:

Cost total cost number of units unit cost

manufacturing costs:

Variable 442,000 17,000 $26

Fixed 170,000 17,000 10

Total 612,000 36

Selling and Administrative expenses :

Variable ($2 per unit sold) 34,000

Fixed 32,000

total 66,000

Prepare a new income statement for the year using variable costing. Comment on the differences, if any, between the absorption costing and variable costing income statements.