Explain the difference between variable costing and absorption costing income statements.

Explain the difference between variable costing and absorption costing income statements.

Question:

Please answer each of the following questions in detail. Provide in-text citations and include examples whenever applicable.

1. Is variable costing income statement applicable to service operations? If so, provide a hypothetical example of variable costing income statements in a service operation. Explain your example in detail and provide in-text citations.
2. Explain the difference between variable costing and absorption costing income statements. Provide a hypothetical income statement in both formats in which the number of units sold is different than the number of units manufactured. Explain the contrast between the two formats.

Note:

1. Define the words in the own words. Do not directly quote from the textbook.

2. Need to include hypothetical examples.

2. Need to write at least 2 paragraphs of the written part. (Exclude hypothetical example)

3. Need to include the information from the textbook as the reference.

4. Need to include at least 2 peer reviewed article as the reference.

5. Provide in-text citations and include examples whenever applicable. 

5. Please find the related power point and textbook in the attachment