The following information was collected for the first year of manufacturing for Appliance Apps:

Direct Materials per Unit	$2.25
Direct Labor per Unit	$1.50
Variable Manufacturing Overhead per Unit	$0.25
Variable Selling and Administration Expenses	$1.75
Units Produced	40,000
Units Sold	36,000
Sales Price	$12
Fixed Manufacturing Expenses	$120,000
Fixed Selling and Administration Expenses	$20,000

Prepare an income statement under the variable costing method.

Appliance Apps
Income Statement
Sales	$fill in the blank 3d2933f2afa0fe1_2
Variable Cost of Goods Sold	fill in the blank 3d2933f2afa0fe1_4
Gross Contribution Margin	$fill in the blank 3d2933f2afa0fe1_6
Variable Selling and Administration Expenses	fill in the blank 3d2933f2afa0fe1_8
Contribution Margin	$fill in the blank 3d2933f2afa0fe1_10
Fixed Manufacturing Expenses	fill in the blank 3d2933f2afa0fe1_12
Fixed Selling and Administration Expenses	fill in the blank 3d2933f2afa0fe1_14
Net Income	$fill in the blank 3d2933f2afa0fe1_16

Prepare a reconciliation to the income under the absorption method.

Appliance Apps
Reconciliation
Net Income under Variable Costing	$fill in the blank 250cf904ef87028_2
Add: Fixed Manufacturing Overhead Deferred	fill in the blank 250cf904ef87028_4
Net Income under Absorption Costing	$fill in the blank 250cf904ef87028_6