Cool Sky reports the following for its first year of operations. The company produced 42,000 units and sold 34,000 units at a price of $110 per unit.

1. Assume the company uses absorption costing. Prepare its income statment for the year under absorption costing

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

Cool Sky reports the following for its first year of operations. The company produced 42,000 units and sold 34,000 units at a price of $110 per unit Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 42 per unit $ 16 per unit $ 5 per unit $ 378,000 per year $ 10 per unit $ 105,000 per year Exercise 6-3 (Algo) Part 1b 1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing. 3,740,000 Income Statement (Absorption Costing) Sales $ Cost of goods sold Gross profit Selling and administrative expenses Income $ 3,740,000 3,740,000 Cool Sky reports the following for its first year of operations. The company produced 42,000 units and sold 34,000 units at a price of $110 per unit. Direct materials $ 42 per unit Direct labor $ 16 per unit Variable overhead $5 per unit Fixed overhead $. 378,000 per year Variable selling and administrative expenses $ 10 per unit Fixed selling and administrative expenses $ 105,000 per year Exercise 6-3 (Algo) Part 2b 2b. Assume the company uses variable costing. Prepare Its Income statement for the year under variable costing. Income Statement (Variable Costing) Sales Less: Variable expenses Variable cost of goods sold Variable selling and administrative expenses Less: Fixed expenses Fixed overhead Fixed selling and administrative expenses Income