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. an income statement using absorption costing.*

b. 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. You will not need to enter colons (:) on the financial statements. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Expenses should be positive.