Tech Helpers Company prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Tech Helpers provides a personal computer maintenance service that is sold for \($100.\) The variable and fixed cost data are as follows:

During 2015, 4,000 service contracts were started and 5,000 service contracts were completed. At the beginning of 2016, Tech Helpers had 1,000 service contracts in process at a per-unit cost of \($90\) in beginning work-in-process inventory.

Required

a. Calculate reported income for management.

b. Calculate reported income for the bank.

c. Reconcile the two income amounts.

Direct labor.. Overhead: Variable cost per unit $ 25.00 $ 5.00 Fixed cost... Marketing, general, and administrative: Variable cost (per service contract completed) Fixed cost (per month)... $240,000 $ 5.00 $ 20,000