49. LO.6 & LO.7 (Absorption & variable costing) Bird's Eye View manufactures satellite dishes used in residential & commercial installations for satellite-broadcasted television. For each unit, the following costs apply: $50 for direct material, $100 for direct labor, & $60 for variable overhead. The company's annual fixed overhead cost is $750,000; it uses expected capacity of 12,500 units produced as the basis for applying fixed overhead to products. A commission of 10% of the selling price is paid on each unit sold. Annual fixed selling & administrative expenses are $180,000. Selling price per unit 2010 2011 $ 500 $ 500 Number of units sold 10,000 12,000 Number of units produced 12,500 11,000 Beginning inventory (units) 7,500 10,000 Ending inventory (units) 10,000 ? Prepare pre-tax income statements under absorption & variable costing for 2010 & 2011, with any volume variance being charged to COGS. Reconcile the differences in income for the two methods.