Absorption and variable costing Bird's Eye View manufactures satellite dishes used in residential and commercial installations for satellite-broadcasted television. For each unit, the following costs apply: $50 for direct material, $100 for direct labor, and $60 for variable overhead. The company's annual fixed overhead cost is $300,000; it uses expected capacity of 5,000 units produced as the basis for applying fixed overhead to products. A commission of 10 percent of the selling price is paid on each unit sold. Annual fixed selling and administrative expenses are $72,000. The following additional information is available: Year 1 Year 2 Selling price per unit $500 $500 Number of units sold 4,000 4,800 Number of units produced 5,000 4,400 Beginning inventory (units) 3,000 4,000 Ending inventory (units) 4,000 ? a. Prepare pre-tax income statements under absorption and variable costing for Year 1 and Year 2, with any volume variance being charged to Cost of Goods Sold. Note: Do not use negative signs in your answers. 2,400,000 Bird's Eye View Income Statements (Absorption) For the Years Ended December 31, Year 1 and Year 2 Year 1 Year 2 Sales $ 2,000,000 $ CGS $ 0 $ 0 Underapplied FOH 0 0 0 Gross profit 0 $ S&A: Variable $ 0 $ 0 0 $ 0 0 0 0 0 Fixed Income before taxes $ 0 $ 0 b. Prepare pre-tax income statements under variable costing for Year 1 and Year 2, with any volume variance being charged to Cost of Goods Sold. Note: Do not use negative signs in your answers. Bird's Eye View Income Statements (Variable) For the Years Ended December 31, Year 1 and Year 2 Year 1 Year 2 $ $ Sales CGS Product CM $ ooooo $ o 0 0 0 0 Variable S&A Total CM $ $ Fixed costs: $ $ Factory S&A 0 0 | Income before taxes $ $