Instruction On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January Units Production 50,000 Sales ($18 per unit) 42,000 Inventory, January 31 8,000 Manufacturing costs: Variable $575,000 Fixed 80,000 Total $655,000 Selling and administrative expenses: Variable $35,000 Fixed 10,500 Total $ 45,500 Required: (a) Prepare an income statement using absorption costing. * (b) Prepare an income statement using variable costing.* *Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Less" or Plus will automatically appear if it is required. You will not need to enter colons (:) on the financial statements. If a net loss is incurred, enter that amount as a negative number using a minus sign. Labels Fixed costs For Month Ended January 31, 20-- Amount Descriptions Contribution margin Cost of goods manufactured Cost of goods sold Fixed manufacturing costs Fixed selling and administrative expenses Gross profit Income from operations Inventory, January 31, 20-- Manufacturing margin Sales Selling and administrative expenses Variable cost of goods manufactured Variable cost of goods sold Variable selling and administrative expenses Prepare an income statement using absorption costing. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Less" or "Plus will automatically appear if it is required. You will not need to enter colons (.) on the financial statements. If a net loss is incurred, enter that amount as a negative number using a minus sign. Townsend Co. Absorption Costing Income Statement (Label) 1 2 Cost of goods sold: 3 4 5 6 7 8 Prepare an income statement using variable costing. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Less" or "Plus" will automatically appear if it is required. You will not need to enter colons (:) on the financial statements. If a net loss is incurred, enter that amount as a negative number using a minus sign. Townsend Co. Variable Costing Income Statement (Label) 1 2 Variable cost of goods sold: 3 4 5 6 7 8 9 (Label) 9 (Label) 10 11 12