Exercise 19-3 (continued) Part 2 ..... 24,500,000 14,000,000 SIMS COMPANY Absorption Costing Income Statement Sales (70,000 units x $350 per unit) Cost of goods sold (70,000 units x $200 per unit").... Gross profit Selling and administrative costs ($770,000+ $4,250,000). Net income "Direct materials. per unit Direct labor...... per unit Variable overhead ($3,000,000/100,000 per unit units)................ Fixed overhead ($7,000,000/100,000 units)... per unit Total absorption cost per unit... per unit Exercise 19-3 (25 minutes) Part 1 SIMS COMPANY Variable Costing Income Statement Sales (70,000 units x $350/unit) .......... 24,500,000 Variable expenses Var, manuf. expense (70,000 units X 130/unit*).................. 9 100 1000 Var. selling and administrative expense. ... 770,000 ubora Total variable expenses. Contribution margin... Fixed expenses Fixed manufacturing expenses.. Fixed selling and administrative expenses. Total fixed expenses..... Net income... * Direct materials............... per unit Direct labor... Variable overhead..... per unit Total variable manuf. cost...... 5 per unit per unit Sims Company, a manufacturer of tablet computers, began operations on January 1, 2017. Its cost and sales information for this year follows. $40 per unit $60 per unit $3,000,000 $7,000,000 Manufacturing costs Direct materials Direct labor... Overhead costs for the year Variable overhead. Fixed overhead ... Selling and administrative costs for the year Variable.. Fixed Production and sales for the year Units produced. Units sold Sales price per unit $770,000 $4,250,000 100,000 units 70,000 units $350 per unit 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. 3. Under what circumstance(s) is reported income identical under both absorption costing and variable costing