Absorption and Variable Costing Income Statements: Production Exceeds Sales Glendale Company sells its product at a unit price of $12.00. Unit manufacturing costs are direct materials, $2.00; direct labor, $3.00; and variable manufacturing overhead, $1.50. Total fixed manufacturing costs are $20,000 per year. Selling and administrative expenses are $1.00 per unit variable and $11,000 per year fixed. Though 25,000 units were produced during 2009, only 23,000 units were sold. There was no beginning inventory.

(a) Prepare a functional income statement using absorption costing. (Do not use negative numbers with your answers.) Glendale Company Functional (Absorption Costing) Income Statement For the year 2009 Sales s276,000 167,900 Cost of goods sold Gross profit Other expenses: Variable selling and administrative Fixed selling and administrative 108,100 $ 23,000 11,000 34,000 Net income s74,100