3. Income statements - absorption costing vs direct costing. The Denton Corporation produced 24,000 units (normal capacity) of product during the first quarter of the year; 20,000 units were sold at $22 per unit. The costs of this production were: Materials. Direct labor.. Factory overhead: 60,000 60,000 120,000 96,000 Marketing and administrative expenses for the quarter total $70,000; all are fixed expenses. Required: (1) An income statement using absorption costing (2) An income statement using direct costing