Oak Mart, a producer of solid oak tables, reports the following data from its second year of business.

1. Prepare the current year income statement for the company using variable costing.
2. Prepare the current year income statement for the company using absorption costing.
3. Explain any difference between the two income numbers under the two costing methods in parts 1 and 2.

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$320 per unit Manufacturing costs this year Sales price per unit . . . _ _ . . . . Units produced this year.. ..5,000 units Units sold this year . . . . . .18,000 units Units in beginning-year inventory Beginning inventory costs Direct materials Direct labor . .. . .. . Overhead costs this year . . .$62 per unit 3,000 units .. $3,220,000 $7,400,000 Fixed overhead Selling and adminstrative costs this year Variable (3,000 units X $135) $405,000 Total. .. $645,000 Variable $1,416,000 _ _ ._ . . ._.