The following absorption costing income statement and additional data are available from the accounting records of Bernon Co. for the month ended

The following absorption costing income statement and additional data are available from the accounting records of Bernon Co. for the month ended May 31, 2007. During the accounting period, 17,000 units were manufactured and sold at a price of $60 per unit. There were no beginning inventories.

                                  Bernon Co.

               Absorption Costing Income Statement

                  For the Month Ended May 31, 2007

Sales (17,000 @ $60) -------------               $1,020,000

Cost of goods sold --------------------                 612,000

Gross profit ---------------------------                 $ 408,000

Selling and administrative expenses              66,000

Income from operations                           $ 342,000

 Manufacturing costs                     Total Cost                    Number of Units                     Unit Cost

Variable                                       $442,000                         17,000                                  $26

Fixed                                             170,000                         17,000                                   10

Total                                            $612,000                         34,000                                  $36

Selling and administrative expenses:

Variable ($2 per unit sold)               $34,000

Fixed                                              32,000

Total                                             $66,000

Required:

Prepare a new income statement for the year using variable costing. Comment on the differences, if any, between the absorption costing and the variable costing income statements.