Exercise 6-5 Absorption coating and variable costing income statements

Rey Company's single product sells at a price of $216 per unit . Data for its single product for its first year of operations follow . Prepare an income statement for the year assuming (a) absorption costing and (variable costing)

Direct Materials $20 per unit

Direct Labor. $28 per unit

Overhead cost

Variable overhead $6 per unit

Fixed overhead per yr. $160,0000 per year

Selling and administrative expenses

Variable. $18 per unit

Fixed. $200,000 per year

Units produced (and sold). $20, 000 units