Cool Sky Company reports the following costing data on its product for its first year of operations. During this first year, the company produced 40,000 units and sold 32,000 units at a price of $120 per unit.

Production costs
Direct materials per unit	$	48
Direct labor per unit	$	18
Variable overhead per unit	$	6
Fixed overhead for the year	$	400,000
Selling and administrative cost
Variable selling and administrative cost per unit	$	9
Fixed selling and administrative cost per year	$	120,000

Assume that this company uses absorption costing. Prepare its income statement for the year under absorption costing.

COOL SKY COMPANY
Absorption Costing Income Statement
Net income (loss)

Assume that this company uses variable costing. Determine its unit product cost.

Per unit product cost using:	Variable costing
Cost per unit

Assume that this company uses variable costing. Prepare its income statement for the year under variable costing.

COOL SKY COMPANY
Variable Costing Income Statement
Net income (loss)