Variable and Absorption Costing-Service Company Tech Helpers Company prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Tech Helpers provides a personal computer maintenance service that is sold for $100. The variable and fixed cost data are as follows: $25.00 $5.00 Direct labor Overhead Variable cost per unit Fixed cost (annual) Marketing, general and administrative Variable cost (per service contract completed) Fixed cost (annual cost) $240,000 $5.00 $20,000 During 2019, 4,500 service contracts were started and 5,000 service contracts were completed. At the beginning of 2019, Tech Helpers had 500 service contracts in process at a per-unit cost of $90 in beginning work-in-process inventory. a. Calculate reported income for management. Do not use negative signs with any answers. Absorption Costing Income Statement Sales $ 500,000 Cost of Goods Sold: Beginning Inventory $ 45,000 Variable Costs 135,000 Fixed Costs 240,000 Less: Ending Inventory 0 Cost of Goods Sold 420,000 Gross profit 80.000 K > Cost of Goods Sold Gross profit Selling expense Administrative expense Net Income 420,000 80,000 25,000 20,000 35,000 $ 500,000 b. Calculate reported income for the bank. Do not use negative signs with any answers. Variable Costing Income Statement Sales $ Cost of Goods Sold: Beginning Inventory 30,000 x Variable Costs 135,000 Less: Ending inventory - 0 Variable cost of goods sold Variable selling expense Contribution margin Fixed costs: Overhead cost 240,000 Administrative Expense 20,000 Total Fixed Cost Net Income 165,000 x 25,000 310,000 x 260,000 50,000 x