Income Statements under Absorption and Variable Costing with Decrease in Ending Inventory

The following information pertains to Chacon Inc. for last year:

Beginning inventory in units	5,000
Units produced	20,000
Units sold	23,700
Costs per unit:
Direct materials	$11.00
Direct labor	$4.00
Variable overhead	$1.50
Fixed overhead*	$4.15
Variable selling expenses	$3.00
Fixed selling and administrative expenses	$24,300
* Fixed overhead totals $83,000 per year.

Assume that the selling price is $27 per unit.

Required: