In April and May we had sales of $850,000. In April produced 40,000 bags and sold 35,000 bags. In May produced 30,000 bags and sold 35,000 bags.

APRIL:

Direct Materials $450,000

Direct Labor 82,000

Variable Overhead 70,000

Fixed Overhead 10,000

Variable Operating Expenses 50,500

Fixed Operating Expenses 6,000

MAY:

Direct Materials $300,000

Direct Labor 72,000

Variable Overhead 60,000

Fixed Overhead 10,000

Variable Operating Expenses 50,500

Fixed Operating Expenses 6,000

REQUIRED:

1) Using Variable Costing, prepare April and May Income Statements

2) Using Absorption Costing, prepare April and May Income Statements