Exercise 19-7 (Algo) Income reporting under absorption costing and variable costing LO P2 Sims Company began operations on January 1. Its cost and sales information for this year follow. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses Units produced Units sold Sales price $30 per unit $ 50 per unit $ 30 per unit $ 7,000,000 per year $ 11 per unit $ 4,250,000 per year 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. 100,000 units 70,000 units $ 360 per unit