ZBest Mfg. began operations and reported the following for its year ended December 31.

1. Prepare an income statement under absorption costing for the year ended December 31.
2. Prepare an income statement under variable costing for the year ended December 31.

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Direct materials Direct labor... Variable overhead Fixed overhead Sales price......... $6 per unit $11 per unit $3 per unit $680,000 per year $80 per unit Units produced.. Units sold Variable selling and administrative expenses.... Fixed selling and administrative expenses....... 20,000 units 14,000 units $2 per unit $112,000 per year