Exercise 19-7 (Static) 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 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. $ 40 per unit $ 60 per unit $ 30 per unit $ 7,000,000 per year $ 11 per unit $ 4,250,000 per year 100,000 units 70,000 units $ 350 per unit Complete this question by entering your answers in the tabs below. Required 1 Required 2 Pronare an income statement for the year using variable costing 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the year using variable costing. SIMS COMPANY Income Statement (Variable Costing) Sales $ 24,500,000 Less: Variable expenses Variable selling and administrative expenses Variable cost of goods sold Contribution margin Less: Cost of goods sold 0 0 Income (loss) < Required 1 Required 2 > 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the year using absorption costing. SIMS COMPANY Income Statement (Absorption Costing) Sales Cost of goods sold Gross profit Selling and administrative expenses Income $ 24,500,000 24,500,000 $ 24,500,000 < Required 1 Required 2 >