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Sims Company, a manufacturer of tablet computers, began operations on January 1, 2017. Its cost and sales information for this year follows.

1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. 3. Under what circumstance(s) is reported income identical under both absorption costing and variable costing?

Manufacturing costs Direct materials Direct labor Overhead costs for the year 35 per unit 55 per unit Variable overhead $2,100,e0e $8,400,e0e Fixed overhead Selling and administrative costs for the year Variable Fixed $ 725,e0e $4, 500,e0e Production and sales for the year Units produced Units sold Sales price per unit 105,000 units 75,000 units 360 per unit Required 1 Required 2 Required 3 Prepare an income statement for the year using variable costing. SIMS COMPANY Variable Costing Income Statement Net income (loss) SIMS COMPANY Absorption Costing Income Statement Net income (loss) Required 1 Required 2 Required 3 Under what circumstance(s) is reported income identical under both absorption costing and variable costing? Reported income identical under both