### Prepare an income statement for year using variable costing

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##### Reference no: EM132049726

Problem - Sims Company, a manufacturer of tablet computers, began operations on January 1, 2015. Its cost and sales information for this year follows.

Manufacturing costs

Direct materials \$ 35 per unit

Direct labor \$ 55 per unit

Selling and administrative costs for the year

Variable \$ 775,000

Fixed \$ 4,500,000

Production and sales for the year

Units produced 105,000 units

Units sold 75,000 units

Sales price per unit \$ 360 per unit

1. Prepare an income statement for the year using variable costing.

2. Prepare an income statement for the year using absorption costing.

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