Whitman Company has just completed its first year of operations. The company's absorption costing Income statement for the year follows: Whitman Company Income Statement Sales (40,000 units X $43.10 per unit) Cost of goods sold (40,000 units X $25 per unit) Gross margin Selling and administrative expenses Net operating income $1,724,000 1,000,000 724,000 500,000 $ 224,000 The company's selling and administrative expenses consist of $300,000 per year in fixed expenses and $5 per unit sold in variable expenses. The $25 unit product cost given above is computed as follows: $ 12 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($282,000 + 47,000 units) Absorption costing unit product cost 4 6 $ 25 Required: 1. Reco the company's income statement in the contribution format using variable costing 2 Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above