The following price and operating cost information applies to Happy Bikers Motorcycle Company.

Price $$10000$ per motorcycle

Variable manufacturing costs:

Raw materials $ $2000$ per motorcycle

Direct labour and variable overhead $ $1000$ per motorcycle

Fixed manufacturing costs $$40000$ per month

Variable selling and administrative $ $250$ per motorcycle

Fixed selling and administrative $$40000$ per month

No beginning balance in finished goods is evident because the beginning inventory account on the

balance sheet is zero. Average manufacturing is $10$ motorcycles per month. Sales are seasonal, so in

some months no motorcycles are produced while in other months manufacturing is high.

During the most recent month, the entity produced $18$ motorcycles and sold $15.$

Required

$($a$)$ Prepare an income statement for the most recent month using the variable costing method.

$($b$)$ Prepare an income statement for the most recent month using the absorption costing method and

choose a denominator level that represents $$normal$$ capacity.

$($c$)$ Prepare a schedule that reconciles the incomes among the two income statements.