Inventory Valuation under Absorption Costing... Amiens Company produced 20,000 units during its first year of operations and sold 18,900 at $19.40 per unit. The company chose practical activityat 20,000 units to compute its predetermined overhead rate. Manufacturing costs are as follows:

Direct Material $84,000

Direct Labor $103,600

Valuable Overhead $16,065

Fixed Overhead $87,000

PART #1: Prepare an Absorption-Costing Income Statement down to Operating Income.

PART #2: Then prepare a Variable-Costing Income Statement in proper format down to Operating Income. Note this exercise involves a situation where more units were made than sold.