Name Section _ . Problem 1 (Supplemental Problem #1 )-Prepare income statements under variable costing (centribution margin Jerma) and absorption costing (traditional format Costner Company uses an absorption costing system in accounting for the single product it manufactures. The following selected data are for the year 2013. Sakes (10,000 unts) Direct materials used in production (variable cost) Direct labor costs (variable cost) Variable manufacturing overhead Fixed manufacturing overhead Variable seling and administrative expenses Fixed selling and administrative experses $360,000 S 129,600 S 43,200 S 12,960 S 17.280 s 21,600 S 72,000 The company produced 12,000 units and sold 10,000 units. Diret materials and direct labor are variable costs. One unit of direct material goes into each unit of finishod goods. Overhead rates are based on a volume of 12,000 units and are $1.08 and S1.44 per unit for variable and fixed overhead, respectively. The ending inventory is the 2,000 units of finished goods on hand at the end of 2013. There was no inventory at the beginning of 2013. Required: a. Prepare an income statement for 2013 under variable costing b. Prepare and income statement for 2013 under absorption costing. c. Explain the reason for the difference in net income between a and b (write your answer to this requirement below), Hint: You must compute the cost of production per unit (12,000 units were produced) in order to compute the cost of You must compute the cost of prodaction pe aniz (12,000 nis were produced) in order to compute the cest of ending inventory (2,000 units remain in ending inventory at the end of the period) Requirement C