Question $6[17$ points$]$

Stiller Co$.$ has just completed its first year of operations. The company's accountant has prepared an absorption costing income statement for the year:

The company's selling and administrative expenses consist of $$130,000$ per year in fixed expenses and $$9$ per unit sold in variable expenses. The $$19$ per unit product cost given above is computed as follows:

a$)$ Redo the company's income statement in the contribution format using variable costing.

b$)$ Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above.

Net operating income $($loss$)$: Variable.

Fixed manufacturing overhead deferred in inventory

Net operating income $($loss$)$: Absorption.