Profit Centers: Comparison of Variable and Full Costing Yale Company manufactures hair bru...

Profit Centers: Comparison of Variable and Full Costing 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:

Required

1. Prepare an income statement for each year based on full costing.

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2. Prepare an income statement for each year based on variable costing.

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3. Prepare a reconciliation and explanation of the difference each year in the operating income resulting from using the full-costing method and variable-costing method.