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ABC produces sporting equipment. Below are condensed results for the first two years of operation....

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Question

Accounting

ABC produces sporting equipment. Below are condensed results for the first two years of operation. ABC has a December 31 year-end.
\table[[Year 1:,],[25,000,Units Produced],[18,000,Units Sold],[Year 2, the results were exactly reversed:,],[18,000,Units Produced],[25,000,Units Sold],[Each year the following unit prices were the same:,],[$100,Selling Price],[$40,Variable Manufacturing Costs],[$8,Variable Selling Costs],[$200,000,Fixed Administrative Expenses]]
Instructions
A. Calculate net income under variable costing for each year.
B. Calculate net income under absorption costing for each year.
C. Reconcile the differences each year in income from operations under the two costing approaches.
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