Gem Manufacturing Company established the following standard price and cost information:

Sales price $ 50 per unit Variable manufacturing cost $32 per unit Fixed manufacturing cost $ 100,000 total Fixed selling and administrative cost $ 40,000 total

Gem expected to produce and sell 20,000 units. Actual production and sales amounted to 21,500 units.

Required: (a) Prepare the pro forma income statement in contribution format that would appear in Gem's master budget for the year. (b) Prepare the income statement in contribution format that would appear in Gem's flexible budget.