19)

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
Overhead costs for the year
Variable overhead	$	2,100,000
Fixed overhead	$	8,400,000
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.