3.(TCO E) Topple Company produces a single product. Operating data for the company and its absorption costing income statement for the last year is presented below:

Less cost of goods sold:

Variable manufacturing costs are $4 per unit. Fixed factory overhead totals $18,000 for the year. This overhead was applied at a rate of $2 per unit. Variable selling and administrative expenses were $1 per unit sold.

Required: Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements. (Points : 30)