**Solomon Manufacturing Company Financial Analysis****Overview:**Solomon Manufacturing Company produces a product with the following financial details:- **Selling Price per Unit:** $75.30- **Variable Manufacturing Cost per Unit:** $26.90- **Fixed Manufacturing Costs:** $66,000**Production and Sales:**- **Units Produced:** 3,300- **Units Sold:** 2,500**Selling and Administrative Expenses:** $0 (none incurred)**Requirements:**a. **Prepare an Absorption Costing Income Statement**b. **Prepare a Variable Costing Income Statement****Instructions:**You are to complete the income statements based on the provided data using the platforms available. Please ensure that calculations are precise and intermediate results are not rounded.**Income Statement Structure:**- **Solomon Manufacturing Company** - **Absorption Costing Income Statement** - Include revenue, cost of goods sold, gross margin, and other relevant financial indicators.**Notes:**Use detailed and accurate computations to ensure that the cost allocations reflect both fixed and variable elements precisely. Emphasize understanding the differences between absorption and variable costing, particularly how fixed manufacturing costs are handled in both methods.

Lets understand the basics.There are two methods are that followed while preparing income an statement under costs.(1) Full absorption costing method (2) Variable costing methodIn full absorption costing the method, product cost is calculated by adding all the manufacturing variable cost and all manufacturing fixed cost.In variable costing method, product the cost is calculated by adding all the manufacturing variable cost.So basically difference in net operating income under both methods arises only because of valuation of opening and closing the stock. This is because opening and closing stock needs to be calculated using product cost only. a. Absorption costing income statement Particulars units per unit Total ASales 2,500$75.30$188,250 Production cost Variable manufacturing overhead3,300$26.90$88,770 Fixed manufacturing overhead3,300$20$66,000 Cost of production 3,300$46.9$154,770 Less:Closing stock of finished goods 800$46.9$37,520 BCost of goods sold 2,500$46.9$117,250 A-BNet profit $471,000 b. Variable costing income statement Particulars Units Per unit Total (A)Sales 2,500$75.30$188,250 Production cost Variable cost Less:-Variable overhead3,300$26.90$88,770 Cost of production 3,300$26.90$88,770Less:Closing stock of finished goods 800$26.90$21,520 (B)Cost of goods sold 2,500$26.90$67,250 (A-B)Contribution $120,730 Less:-Manufacturing overhead $66,000 Net profit $54,730a. Solomon Manufacturing CompanyAbsorption Costing Income Statement Particulars Total ASales $188,250 Production cost Variable manufacturing overhead$88,770 Fixed manufacturing overhead$66,000 Cost of production $154,770 Less:Closing stock of finished goods $37,520 BCost of goods sold $117,250 A-BNet profit$471,000b.Solomon Manufacturing CompanyVariable costing income statement Particulars Total (A)Sales $188,250 Production cost Variable cost Less:-Variable overhead$88,770 Cost of production $88,770Less:Closing stock of finished goods $21,520 (B)Cost of goods sold $67,250 (A-B)Contribution $120,730 Less:-Manufacturing overhead$66,000 Net profit $54,730