ABC Company began operations on June 1 of the current year. During this time, the company produced 370,000 units and sod 310,000 units at a sales price of $50 per unit. Cost information for this period is shown below:
Production costs
Direct Materials $2.00 per unit
Direct labor $.80 per unit
Variable overhead $814,000 in total
Fixed overhead $481,000 in total
Non production costs
Variable selling/admin. $78,000 in total
Fixed selling $210,000 in total
a) Prepare the income statement for the current year under absorbtion costing
b) Prepare the income statement for the current year under variable costing