Roller Paint Co. reported the following data for the month of September. There were no beginning inventories and all units were completed (no work in process). Total Cost Number of Units Unit Cost Manufacturing costs: Variable $465,000 30,000 $15.50 Fixed Total 210,000 30,000 7.00 $675,000 $22.50 Selling and administrative expenses: Variable $2 per unit sold Fixed $39,000 In the month of September, 28,000 of the 30,000 units manufactured were sold at a price of $80 per unit. a. Prepare a variable costing income statement. Roller Paint Co. Variable Costing Income Statement For the Month Ended September 30 Sales Variable cost of goods sold: Variable cost of goods manufactured 2,240,000 Fixed manufacturing costs X Variable selling and administrative expenses X Manufacturing margin Fixed manufacturing costs X Contribution margin -434,000 X 56,000 X 1,750,000 X 434,000 X 56,000 1,750,000 Fixed costs: Fixed manufacturing costs 210,000 Fixed selling and administrative expenses 39,000 190,000 X Income from operations 1,501,000 b. Prepare an absorption costing income statement. Roller Paint Co. Absorption Costing Income Statement For the Month Ended September 30 Sales 2,240,000 Cost of goods sold: Cost of goods manufactured 434,000 X Contribution margin X 196,000 X Cost of goods sold Gross profit Selling and administrative expenses Income from operations 1,610,000 X -56,000 X -39,000 X 1,515,000 c. Briefly explain why there is a difference in income from operations between the two methods. The difference in the amount of income from operations is a result of the treatment of fixed manufacturing expenses