The manufacturing and selling data for Lost Online Inc. for the year 2019 is given below: -

- - - Selling price ............................. $30 /kg

- - - Sales ......................................... 75000 kg

- - - Finished goods (beginning)... 10780

- - - Finished goods (ending)......... 15910

Manufacturing costs:

- - - Variable................................... $6 /kg

- - - Fixed......................................... $300000 /year

Selling and administrative expenses:

- - - Variable................................... $2/kg

- - - Fixed......................................... $290000 /year

Prepare

(a) Income statement using absorption costing.

(b) Income statement using variable costing.

(c) Reconciliation of net operating income

(d) Explain the differences in net operating income between the two methods.