Hi Oscar,

First, you need to find the Unit Product Cost (UPC) for both Absorption Costing (AC) and Variable Costing (VC).

UPC for AC

= Variable Manufactured cost + (Fixed Manufactured cost / Production)

= $100 + ($20 000 / 400 units)

= $100 + $50

= $150

UPC for VC

= Variable Manufactured cost

= $100

Second, you forgot to put Beginning Inventory (BI) for both AC and VC.

BI for AC

= 150 units x UPC for AC

= 150 units x $150

= $22 500

BI for VC

= 150 units x UPC for VC

= 150 units x $100

= $15 000

Third, you put the wrong value of reconcile income.

(Difference in income = Change in inventory units x Fixed overhead rate per unit)

Fixed overhead rate per unit should be $20,000/400

Here's the summary.

Absorption costing; Net Profit = $25 200

Variable costing; Net Profit = $31 200

Profit difference = $6 000

Reconcile the difference in income for AC and VC

= Change in inventory units x Fixed overhead rate per unit

= 120 x (20000/400)

= 120 x 50

= $6 000

Cheers...