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The following data are for Paso Robles Company for the year ended 2009 December 31: COSTS : DIRECT MATERIAL$90000 DIRECT LABOR130000 MANUFACTURING OVERHEAD : VARIABLE45000

The following data are for Paso Robles Company for the year ended 2009 December 31:

COSTS :

DIRECT MATERIAL$90000

DIRECT LABOR130000

MANUFACTURING OVERHEAD :

VARIABLE45000

FIXED90000

SALES COMMISSION (VARIABLE)25000

SALES SALARIES (FIXED)20000

ADMINISTRATIVE EXPENSES (FIXED)35000

SELLING PRICE PER UNIT10

UNITS PRODUCED AND SOLD60000 UNITS

(a)Assume that for the above data, you had inventory of 5000 units at the end of year, contribution margin income statement and a traditional income statement.

(b)Comment on the difference between net income calculated through the above mentioned approaches.

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