Absorption and Variable Costing Income Statements: Production Exceeds Sales Glendale Company sells its product at a unit price of $13.00. Unit manufacturing costs are direct materials, $2.50; direct labor, $3.00; and variable manufacturing overhead, $1.50. Total fixed manufacturing costs are $25,000 per year. Selling and administrative expenses are $1.00 per unit variable and $10,000 per year fixed. Though 25,000 units were produced during 2014, only 22,000 units were sold. There was no beginning inventory. (a) Prepare a functional income statement using absorption costing. (Do not use negative signs with your answers.)

Glendale Company Functional (Absorption Costing) Income Statement For the year 2014
Sales		$Answer
Cost of goods sold		Answer
Gross profit		Answer
Other expenses:
Variable selling and administrative	$Answer
Fixed selling and administrative	Answer	Answer
Net income		$Answer

(b) Prepare a contribution income statement using variable costing. (Do not use negative signs with your answers.)

Glendale Company Contribution (Variable Costing) Income Statement For the Year 2014
Sales		$Answer
Variable expenses:
Cost of goods sold	$Answer
Selling and administrative	Answer	Answer
Contribution margin		Answer
Fixed expenses:
Manufacturing overhead	$Answer
Selling and administrative	Answer	Answer
Net income		$Answer