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 $25,000 per year. Selling and administrative expenses are $1.00 per unit variable and $14,000 per year fixed. Though 25,000 units were produced during 2009, only 17,000 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 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 numbers with your answers.) Glendale Company Contribution (Variable Costing) Income Statement For the year 2009 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