On June 30, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on the variable costing concept:

a. Prepare an absorption costing income statement.
b. Reconcile the variable costing income from operations of $1,255,000 with the absorption costing income from operations determined in (a).

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$7,450,000 Variable cost of goods sold: Variable cost of goods manufactured (500,000 units x $14 per unit) $7,000,000 1,120,000 Less ending inventory (80,000 units x $14 per unit) Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin. Fbxed costs 5,880,000 $1570,000 80,000 $1,490,000 Fixed manufacturing costs Fixed selling and administrative expenses ...$ 160,000 75,000 235,000 $1.255,000 Income from operations