YYZ has the following financial information:

		Current Year	Prior Year
# Units in Beginning Inventory		?	0
# Units Sold		570,000	580,000
# Units Manufactured (Actual)		610,000	590,000
# Units Manufactured (Budget)		640,000	600,000
Selling Price	(per unit)	10.00	9.90
Variable Manufacturing Costs	(per unit)	5.00	4.80
Variable Sales+Admin Costs	(per unit)	1.00	1.00
Fixed Manufacturing Costs (Budget and Actual)	(total)	1,600,000	1,560,000
Fixed sales+admin costs (actual)	(total)	360,000	350,000
Net income (Variable Costing)		322,000	468,000

Inventory is recorded at FIFO

Required:

1. Calculate the value of the Ending Inventory under Absorption Costing and Variable costing for the prior year and current year
2. Prepare an income statement under Absorption Costing for the current year
3. Reconcile the difference in Operating Income between Variable costing and Absorption Costing for the current year