Exercise 6-5 Absorption costing and variable costing income statements LO P2 Rey Companys single product sells at a price of $224 per unit. Data for its single product for its first year of operations follow. Direct materials $ 28 per unit Direct labor $ 36 per unit Overhead costs Variable overhead $ 14 per unit Fixed overhead per year $ 448,000 per year Selling and administrative expenses Variable $ 26 per unit Fixed $ 216,000 per year Units produced and sold 28,000 units

1. Prepare an income statement for the year using absorption costing

2. Prepare an income statement for the year using variable costing.