AJ Manufacturing Company incurred $51,500 of fixed product cost and $41,200 of variable product cost during its first year of operation. Also during its first year, AJ incurred $16,450 of fixed and $13,300 of variable selling and administrative costs. The company sold all of the units it produced for $166,000.

Required

1. Prepare an income statement using the format required by generally accepted accounting Principles (GAAP).

2. Prepare an income statement using the contribution margin approach.

AJ Manufacturing Company incurred $51,500 of fixed product cost and $41,200 of variable product cost during its first year of operation. Also during its first year, AJ incurred $16,450 of fixed and $13,300 of variable selling and administrative costs. The company sold all of the units it produced for $166,000. Required a. Prepare an income statement using the format required by generally accepted accounting Principles (GAAP). AJ MANUFACTURING COMPANY Income Statement Revenue $ 166,000 Cost of goods sold Gross margin Selling and administrative Net income b. Prepare an income statement using the contribution margin approach. AJ MANUFACTURING COMPANY Income Statement Revenue $ 166,000 Variable cost Contribution margin Fixed cost Net income