Problem 1 (4 marks) Johnson Stores produce and sell face powder called the Success' in cases. Each case is sold for $80. The following information relates to the product in the autumn and summer of 2020: Sales Production Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expenses Variable selling expenses Variable administrative expenses are 10% of sales value Fixed administrative expenses are 25% of sales value Autumn 23,400 units 28,500 units $ 136,800 $133,950 $71,250 $120,000 $25,500 $42,750 Summer 35,700 units 30,600 units $146,880 $143,820 $76,500 $122,000 $25,500 $45,900 Normal capacity for the year was 117,600 cases to be produced evenly throughout the year with a budgeted cost of $470,400. Assume that there will be no inventory held on January 1, 2020. Required: (1) Prepare profit statement for each of the two quarters using absorption and variable costing techniques. (2) Compute and reconcile the differences in the operating incomes of both techniques. (3) Comment on the differences in the operating income between both techniques