Variable and Absorption Costing Ansara Company had the following abbreviated income statement for the year ended December 31, 2012: (in millions) $26,770 $22,750 Cost of goods sold Selling, administrative, and other expenses 2,410 Total expenses Income from operations Assume that there were $5,830 million fixed manufacturing costs and $1 330 million fixed selling, administrative, and other costs for the year. The finished goods inventories at the beginning and end of the year from the balance sheet were as follows: January 1 $3,180 million December 31 $3,710 million Assume that 30% of the beginning and ending inventory consists of twed costs. Assume work in process and materials inventory were unchanged during the period a. Prepare an income statement according to the variable costing concept for Ansara Company for 2012. Ansara Company Variable Costing Income Statement For the Year Ended December 31, 2012 in millions Variable cost of goods sold: Beginninger Fund costs b. Explain the difference between the amount of income from operations reported under the absorption conting and variable costing concepts The income from operations under the variable costing concept be the same as the income from operations under the absorption costing concept when the inventores the increase or decrease during the year in this case, Ansara's entory meaning it so that produced. As a result, the income from operations under the variable costing concept will be than the income from operations under the absorption costing concept. The reason is because the variable costing concept deduct the feed costs in the period that they are incurred, regardless of changes in inventory balances