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Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company...

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Accounting

Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations:
Prior Year Current Year
Sales (000s)1,800 units 2,200 units
Production (000s)2,000 units 2,000 units
Production cost
Factoryvariable (per unit) $ 0.60 $ 0.60
fixed (000s) $ 1,000 $ 1,000
Marketingvariable (per unit) $ 0.40 $ 0.40
Administrativefixed (000s) $ 500 $ 500
Required:
1. Prepare an income statement for each year based on full costing.
2. Prepare an income statement for each year based on variable costing.
3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method.

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