Income Statements, Variable and Absorption Costing The following information pertains to Vladamir, Inc., for last year: Beginning inventory, units 1,400 Units produced 100,000 Units sold 101,000 Variable costs per unit: Direct materials $8.00 Direct labor $10.00 Variable overhead $1.00 Variable selling expenses $2.00 Fixed costs per year: Fixed overhead $200,000 Fixed selling and administrative expenses $240,000 There are no work-in-process inventories. Normal activity is 100,000 units. Expected and actual overhead costs are the same. Costs have not changed from one year to the next. Required. 2. Without preparing an income statement, indicate what the difference will be between variable-costing income and absorption-costing income. 3a. Assume the selling price per unit is $32. Prepare an income statement using variable costing. Vladamir, Inc. Variable-Costing Income Statement For Last Year Sales 3,232,000 Less: Variable cost of goods sold 1,919,000 Variable selling expenses 202,000 Contribution margin 1,111,000 Less: Fixed overhead 200,000 Fixed selling and administrative expenses 230,000 X $ Operating income 681,000 X 3b. Assume the selling price per unit is $32. Prepare an income statement using absorption costing. Vladamir, Inc. Absorption-Costing Income Statement For Last Year Sales $ 3,232,000 Less: Cost of goods sold 2,121,000 Gross profit 1,111,000 Less: Selling and administrative expenses 432,000 679,000 Operating income