The following data were adapted from a recent income statement of Procter & Gamble Company:

Assume that the variable amount of each category of operating costs is as follows:

a. Based on the above data, prepare a variable costing income statement for Procter & Gamble Company, assuming that the company maintained constant inventory levels during the period.
b. If Procter & Gamble reduced its inventories during the period, what impact would that have on the income from operations determined under absorption costing?

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(in millions) Net sales.... Operating costs: Cost of products sold..... Marketing, administrative, and other expenses. Total operating costs.. Income from operations... $78,938 $37,919 24,998 $62,917 $16,021 (in millions) Cost of products sold ...... Marketing, administrative, and other $21,230 10,000 expenses