Stonehenge inc., a manufactuerer of landscaping blocks, began operations on April 1 of the current year. During this time, the company produced 750,000 units and sold 720,000 units at a sale price of $9 per unit. Cost information for this period is shown below.
Production costs
Direct Materials: 1.80 per unit
Direct Labor: .30 per unit
Variable overhead: 495,000 in total
Fixed overhead: 450,000 in total
Non-production costs
Variable selling administrative: 18,000 in total
Fixed selling and administrative: 53,000 in total
a) Prepare Stonehenge's december 31st income statement for current year under absorption costing
b) Prepare stonehenge's december 31st income statement for current year under variable costing.