Sales (225 × $1,600) $ 360,000 Variable production cost (225 × $625) 140,625 Variable selling and administrative expenses (225 × $65) 14,625 Contribution margin 204,750 Fixed overhead cost 56,250 Fixed selling and administrative expense 75,000 Net income $ 73,500 1. Prepare this company's income statement for its first month of operations under absorption costing.

Xinhong company is considering replacing one of its manufacturing machines. the machine has a book value of $39,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. it has a current market value of $49,000. variable manufacturing costs are $33,300 per year for this machine. information on two alternative replacement machines follows. alternative a alternative b cost $ 115,000 $ 117,000 variable manufacturing costs per year 22,900 10,100 1. calculate the total change in net income if alternative a and b is adopted. 2. should xinhong keep or replace its manufacturing machine