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		1,800	units		2,200	units
Production		2,000	units		2,000	units
Production cost
Factoryvariable (per unit)	$	0.60		$	0.60
fixed	$	1,000		$	1,000
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.