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Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data

Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations:

Prior Year Current Year
Sales 2,300 units 3,700 units
Production 3,000 units 3,000 units
Production cost
Factoryvariable (per unit) $ 0.60 $ 0.60
fixed $ 1,500 $ 1,500
Marketingvariable $ 0.40 $ 0.40
Administrativefixed $ 500 $ 500

Required:

1. Prepare an income statement for each year based on full costing.

2. Prepare an income statement for each year based on variable costing.

3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method.

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