The duller Edge Inc. assembles and sells MP3 players. The company began operations on May 1, 2012, and operated at 100 % of capacity during the first month. The following data summarize the results for May:

a. Prepare an income statement according to the absorption costing conceptb. Prepare an income statement according to the variable Costing concept.c. What is the reason for the difference in the amount of income from operations reported in (a) and (b)?

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Sales (20,000 units).. Production costs (27,000 units): Direct materials. Direct labor.... Variable factory overhead. Fixed factory overhead... Selling and administrative expenses: Variable selling and administrative expenses.. Fixed selling and administrative expenses..... $4,000,000 $1,998,000 972,000 486,000 ... 3,780,000 324,000 $ 560,000 ....... .... ....... ...... 150,000 710,000