Variable Costing Income Statement

On July 31, 2016, the end of the first month of operations, Holton Company prepared the following income statement, based on the absorption costing concept:

a. Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $81,000 and the variable selling and administrative expenses were $58,000. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar.

Holton Company
Income Statement-Variable Costing
For the Month Ended July 31, 2016
Sales		$
Variable cost of goods sold:
Variable cost of goods manufactured	$
Less ending inventory
Variable cost of goods sold
Manufacturing margin		$
Variable selling and administrative expenses
Contribution margin		$
Fixed costs:
Fixed manufacturing costs	$
Fixed selling and administrative expenses
Income from operations		$

Feedback

Part A I did & it is correct but I need help on part B

Sales (22,000 units)					$1,320,000
Cost of goods sold:
	Cost of goods manufactured		$1,046,250
	Less ending inventory (5,000 units)		193,750
	Cost of goods sold				852,500
Gross profit					$467,500
Selling and administrative expenses					127,000
Income from operations					$340,500

b. Reconcile the absorption costing income from operations of $340,500 with the variable costing income from operations determined in (a).

Reconciliation of Absorption and Variable Costing Income
Absorption costing income from operations	$
Variable costing income from operations
Difference	$