The following information relates to Dorian Industrial for fiscal 2014, the companys first year of operation:

Units produced		429,000
Units sold		414,000
Selling price per unit	$	50
Direct material per unit	$	15
Direct labor per unit	$	5
Variable manufacturing overhead per unit	$	2
Variable selling cost per unit	$	0.02
Annual fixed manufacturing overhead	$	1,287,000
Annual fixed selling expense	$	314,000
Annual fixed administrative expense	$	118,000

A. Prepare an income statement using full costing. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Dorian Industrial Income Statement For the year ended December 31, 2014

Sales	$20,700,000
Less:	--------------------
Cost of Goods Sold
Gross Margin
Less:	------------------------
Variable Selling Expense
Fixed Selling Expenses
Fixed Administrative Expenses
Net Income

B. Prepare an income statement using variable costing. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Dorian Industrial Income Statement For the year ended December 31, 2014

Sales ? Less: -------------------- Variable Expenses ? ? ? Selling Costs ? Contribution Margin ? Less: ----------------------- Fixed Expenses ? Manufacturing Overhead ? Selling Costs ? Administrative ? Net Income ?

C. Calculate the amount of fixed manufacturing overhead that will be included in ending inventory under full costing and reconcile it to the difference between income computed under variable and full costing. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) -Fixed manufacturing overhead included in ending inventory = ? -Net income under full costing = ? -Net income under variable costing = ? -Difference = ?