Question 4:

a. Prepare an income statement for each year based on full costing.

b. Prepare an income statement for each year based on variable costing.

c. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method.

(Negative amounts should be indicated by a minus sign. Round your "Fixed overhead rate" answers to 2 decimal places. Enter your answers in thousands of dollars)

Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations: \begin{tabular}{|l|c|c|} \hline \multicolumn{1}{|c|}{ YALE COMPANY } \\ \multicolumn{1}{|c|}{ReconcilingDifferenceinOperatingIncomeBetweenFullandVariableCosting} \\ \hline & Prior Year & Current Year \\ \hline Change in inventory in units & & \\ \hlinex fixed overhead rate & & \\ \hline Difference in operating income & & \\ \hline \end{tabular}