5-A1 Straightforward Income Statements The independce Company had the followin manufacturing data for the year 2006 (in thousands of dollar) Beginning and ending inventories None Direct material used 400 Direct labor 330 Supplies 20 Utilities- varible portion 40 Utilities-fixed portion 12 Indirect labor- varible portion 90 Indirect labor - fixed portion 40 Depreciation 200 Property taxes 20 Supervisory Salaries 50 Selling expenses were $300,000 (including that were varible) General administration expenses were $144,000 (including that were variable) Sales were $ 1.8 million Direct labor and supplies are regarded as varible costs 1. Prepare two income statements, one using the contribution approach and one using the absorption approach Absorption approach-Income Statement (in thousand $) Sales Less manufacturing Direct material used Direct Labor Indirect Mfct Gross Margin Selling expenses Adm. Expenses Operating Income Contribution Approach-Income Statment (in thousand $) Sales Less: Variable Expenses