The manufacturing and selling data for Abracadabra Inc. for the year 2018 is given below: -

- - - Selling price ......................................... $35 /unit

- - - Finished goods (beginning).............. 10200 units

- - - Production ........................................... 90680 units

- - - Sales ..................................................... 84300 units

Variable costs:

- - - Manufacturing .................................... $9 /unit

- - - Selling and administrative ................. $2 /unit

Fixed costs:

- - - Manufacturing ...................................... $320000 /year

- - - Selling and administrative .................. $297000 /year

Assuming costs per unit were consistent over the years in both the costing methods, prepare

(a) Income statement using absorption costing.

(b) Income statement using variable costing.

(c) Reconciliation of net operating incomes