AFN Company produces plastic that is used for injection-moulding applications such as gears for small motors. In 2020, the first year of operations, AFN Company produced 4,700 tonnes of plastic and sold 3,431 tonnes. In 2021, the production and sales results were exactly reversed. In each year, the selling price per tonne was $2,200; variable manufacturing costs were 14% of the sales price for the units produced; variable selling expenses were 9% of the selling price of the units sold; fixed manufacturing costs were $3,431,000; and fixed administrative expenses were $578,100.

Prepare comparative income statements for each year using ABSORPTION costing.

Prepare comparative income statements for each year using absorption costing. (Use the format from Illustration 8.4.) AFN COMPANY Income Statement-Absorption Costing For the Years Ended December 31 2020 2021 Number of units produced 4700 3431 Number of units sold 3431 T 4700 7548200 10340000 Sales Less Cost of goods sold a T Inventory, beginning 1177632 Add 3 Costs of goods manufactured 4361600 4110338 Cost of goods available for sale | 4361600 10000OOO OOR 5287970 Inventory, ending 1177632 Less :). Inventory, ending 7 cost of goods sold Gross margin 3183968 5287970 3183968 5287970 Selling and administrative expenses 1508700 1257438 Net income 1675268 4030532