Chataqua Can Company manufactures metal cans used in the food-processing industry. A case of cans sells for $25. The variable costs of production for one case of cans are as follows:

Direct Material	6.50
Direct Labor	1.50
Variable Manu Overhead	6.00
TOTAL Variable cost/unit	14.00

Variable selling and administrative costs amount to $0.70 per case. Budgeted fixed manufacturing overhead is $492,000 per year, and fixed selling and administrative cost is $41,500 per year. The following data pertain to the companys first three years of operation.

		Year 1			Year 2			Year 3
Planned production (in units)		82,000			82,000			82,000
Finished-goods inventory (in units), January 1		0			0			24,000
Actual production (in units)		82,000			82,000			82,000
Sales (in units)		82,000			58,000			94,000
Finished-goods inventory (in units), December 31		0			24,000			12,000

QUESTION: Prepare operating income statements for Chautauqua Can Company for its first three years of operations using:

1. Absorption costing.

2. Variable costing

	Year 1	Year 2	Year 3
Sales rev
Less: COGS
Gross margin
SELLING &ADMIN EXPENSES
Fixed Selling/Administrative
Variable Selling/Administrative
Operating Income