SIMS COMPANY Variable Costing
Income Statement
Manufacturing costs
Direct material $35 per unit
Direct labor $55per unit
Overhead costs
Variable $30 per unit
Fixed $7,350,000
Selling and administrative costs for the year
Variable $7,50,000
Fixed $4,500,000
Production and sales of the year
Units produced 105,000
Units sold 75,000 units
Sales price per unit $ 3,50 per unit
1. Prepare an income statement for the year using variable costing.
2. Prepare an income statement for the year using absorption costing.