BKTVmanufactures and sells 50-inch television sets and uses standard costing. Actual data relating to 2020 are as follows:

Unit data

Beginning inventory 300

Production800

Sales800

Variable costs

Manufacturing cost per unit produced$900

Operating (marketing) cost per unit sold$600

Fixed costs

Manufacturing costs $400,000

Operating (marketing) costs$140,000

The selling price per unit is $2,500. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 1,000 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.

I. Prepare income statements of 2020 under (a) variable costing and (b) absorption costing.