Variable costing income statement

On July 31, 2014, the end of the first month of operations, Rhys Company prepared the following income statement, based on the absorption costing concept:

Sales (96,000 units). . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,440,000

Cost of goods sold:

Cost of goods manufactured . . . . . . . . . . . . . . . . $3,120,000

Less ending inventory (24,000 units) . . . . . . . . 624,000

Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . 2,496,000

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,944,000

Selling and administrative expenses . . . . . . . . . . . . 288,000

Income from operations. . . . . . . . . . . . . . . . . . . . . . . . $1,656,000

1. Prepare a variable costing income statement, assuming that the fixed manufacturing
2. costs were $132,000 and the variable selling and administrative expenses were $115,200.
3. Reconcile the absorption costing income from operations of $1,656,000 with the vari- able costing income from operations determined in (a).