The Zippo controller provides you the following information for the past year:

• 200,000 units were sold at an average price of $27 per unit
• 12,000 units were in beginning finished goods inventory and 24,000 units in ending finished goods inventory
• Variable manufacturing costs during the year are $13 per unit produced
• Variable marketing costs during the year are $4 per unit sold
• Fixed costs consist of $520,000 for manufacturing and $360,000 for SG&A
• All cost information during the year is the same as last year

Using the above information and assuming the fixed manufacturing cost allocation rate is $2.50 per unit, prepare an income statement using absorption accounting.

What is the operating income under variable costing? Provide a reconciliation with operating income under absorption costing.

* Please step-by-step

Thank you