On June 30, 2016, 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 Less ending inventory (80,000 units x $14 per unit)..................... 5,880,000 $1,570,000 Variable selling and administrative Fixed costs 160,000 75,000 Fixed selling and administrative expenses.............................. 235,000 $1,2