Aspen Manufacturing Company sells its products for $33 each. The budgeted production level was 50,000 units, although only 45,000 units were actually produced and 40,000 units were sold.

Unit manufacturing costs are:

Direct materials $6.00

Direct manufacturing labor $9.00

Variable manufacturing costs $4.50

Total fixed manufacturing costs $180,000

Marketing expenses $3.00 per unit, plus $100,000 per year

Required:

a. Prepare an income statement using absorption costing.

b. Prepare an income statement using variable costing.