Midway Manufacturing Company produces and utilizes a direct costing system, based on historical costs, for internal reporting purposes. During 20X1, 200,000 units were sold at a price of $30 each. Variable manufacturing costs each unit sold were $11.75 each, and the fixed manufacturing costs totaled $1,200,000. Midway incurred fixed selling costs, primarily for advertising and sales management, of $250,000. A commission of 10% on sales is paid to sales persons, and distribution costs averaging $2.00 per unit were incurred.

Prepare, in good form, a variable costing income statement for Midway for the year 20X1.