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3. During D Company's first two years of operations, the company reported net operating income as follows: Year 1 Year 2 Sales P1, 000,000 P1, 500,000 Cost of Sales 680,000 1,020,000 Gross Profit 320,000 480.000 Selling and administrative 310,000 340,000 expenses Net income P10,000 P140,000 Selling price = P50.00/unit Inventoriable cost = P34/ unit Selling and administrative = P3 - variable/u; P250,000 total fixed Production = 25,000 every year Year 1 = No beginning inventory in units Year 2 = Sold units of 30,000 and no ending inventory. Direct materials = P8 Direct labor = P10 VFO= 2 Fixed manufacturing overhead = P350,000 Required: Prepare a variable costing income statement. Reconcile the operating income (Absorption -> Variable)