Variable and Absorption Costing-Service Company Lawn RX, Inc. prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Lawn RX provides a quarterly lawn care service that is sold for $175. The variable and fixed cost data are as follows: Direct labor $100.00 Overhead Variable cost per unit $23.00 Fixed cost $100,000 Marketing, general and administrative Variable cost (per service contract completed) $24.00 Administrative expenses (fixed- per month) $42,000 During 2016, 10,000 service contracts were signed and 9,500 service contracts were completed. Lawn RX had no service contracts at the beginning of the year.a. Calculate reported income for management. Do not use negative signs with any answers. Absorption Costing Income Statement Sales $ 1,662,500 Cost of Goods Sold: Beginning Inventory 0 Variable Costs 230,000 Fixed Cost 100,000 Less: Ending Inventory 16,500 Cost of Goods Sold 313,500 Gross profit 1,349,000 Selling expense 228,000 Administrative expense 504,000 Net Income 612,000 b. Calculate reported income for the bank. Do not use negative signs with any answers. Variable Costing Income Statement Sales $ 1,662,500 Cost of Goods Sold: Beginning Inventory 0 Variable Costs 218,500 Less: Ending inventory 11,500 Variable cost of goods sold 230,000 Variable sellingexpense 228,000 Contribution margin 1,204,500 Fixed costs: Overhead cost 100,000 Administrative Expense 504,000 Total Fixed Cost 604,000 Net Income $ 600,500