Variable and Absorption CostingThe following data were adapted from a recent income statement of Caterpillar Inc. $($CAT$)$ for the year ended December $31$:Sales$($in millions$)$$$20,900$Cost of goods soldSelling, administrative, and other expensesTotal expensesOperating income$$(17,770)(1,880)$$$(19,650)$$$1,250$Assume that $$4,600$ million of cost of goods sold and $$1,050$ million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows:Beginning inventory$$2,510$Ending inventory$2,930$Also, assume that $20\%$ of the beginning and ending inventories were fixed costs.a$.$ Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million.Caterpillar Inc.Variable Costing Income Statement $($assumed$)$For the Year Ended December $31($In millions$)$Line Item DescriptionAmountAmountSales$20,900$Variable cost of goods sold:Beginning inventory$2,008$Variable cost of goods manufacturedEnding inventory$2,344$Total variable cost of goods soldManufacturing marginVariable selling and administrative expenses$830$Contribution marginFixed costs:Fixed manufacturing costs$4,600$Fixed selling and administrative expenses$1,050$Total fixed costs$5,650$Operating income