tow pertains to Thomas Tires. $($Thomas Tires had no beginning Finished

Goods Inventory in January $2023.)$

Requirements

Prepare both conventional $($absorption costing$)$ and contribution margin $($variable costing$)$

income statements for Thomas Tires for $2023$ in good format $($include headings$).$

Calculate the difference between the two income results and prove that your difference is

correct. Then, explain why one is higher and what caused the difference.

Thomas Tire's marketing vice president believes a new sales promotion that costs $$50,000$

would increase sales to $155,000$ tires. Should the company go ahead with the promotion?

Why? Must prepare a Contribution Margin income statement to support your answer.

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