Hanks Company produces a single product. Operating data for the company and its absorption costing …

Hanks Company produces a single product. Operating data for the company and its absorption costing income statement for the last year is presented below. Units in beginning inventory……………………………..0 Units produced………………………………………..9,000Units sold………………………………………………8,000 Sales…………………………………………………$80,000 Less cost of goods sold: Beginning inventory………………………………………. 0 Add cost of goods manufactured………………54,000Goods available for sale………………………….54,000 Less ending inventory………………………………6,000 Cost of goods sold………………………………..48,000 Gross margin……………………………………….32,000 Lessselling and admin. expenses……………..28,000 Net operating income…………………………..$ 4,000 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. 6.The followingdata (in thousands of dollars) have been taken from the accounting records of Karmana Corporation for the just-completed year. Sales ………………………………………………………$950 Raw materials inventory, beginning …………………$10Raw materials inventory, ending …………………….$30 Purchases of raw materials ………………………….$120 Direct labor ………………………………………………$180 Manufacturing overhead ……………………………..$230Administrative expenses ……………………………..$100 Selling expenses ………………………………………..$140 Work-in-process inventory, beginning ………………$50 Work-in-process inventory, ending ………………….$40 Finishedgoods inventory, beginning ………………$100 Finished goods inventory, ending ……………………$80 Use these data to prepare (in thousands of dollars) a schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold for the year. Inaddition, elaborate on the relationship between these schedules as they relate to the flow of product costs in a manufacturing company. 7.The following data (in thousands of dollars) have been taken from the accounting records of Karmana Corporation for thejust-completed year. Sales ………………………………………………………$950 Raw materials inventory, beginning …………………$10 Raw materials inventory, ending …………………….$30 Purchases of raw materials ………………………….$120Direct labor ………………………………………………$180 Manufacturing overhead ……………………………..$230 Administrative expenses ……………………………..$100 Selling expenses ………………………………………..$140Work-in-process inventory, beginning ………………$50 Work-in-process inventory, ending ………………….$40 Finished goods inventory, beginning ………………$100 Finished goods inventory, ending ……………………$80 Use these data toprepare (in thousands of dollars) a schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold for the year. In addition, elaborate on the relationship between these schedules as they relate to the flow of product costs in a manufacturingcompany.