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

a. Prepare an income statement using absorption costing.

Townsend Co.
Absorption Costing Income Statement
For the Month Ended January 31
Sales		$fill in the blank 284467f22fcbff0_2
Cost of goods sold:
Cost of goods manufactured	$fill in the blank 284467f22fcbff0_4
Advertising expenses	fill in the blank 284467f22fcbff0_6
Total cost of goods sold		fill in the blank 284467f22fcbff0_8
Gross profit		$fill in the blank 284467f22fcbff0_10
Selling and administrative expenses		fill in the blank 284467f22fcbff0_12
Operating income		$fill in the blank 284467f22fcbff0_13

b. Prepare an income statement using variable costing.

Townsend Co.
Variable Costing Income Statement
For the Month Ended January 31
Sales		$fill in the blank c9868704d066f89_2
Variable cost of goods sold:
Variable cost of goods manufactured	$fill in the blank c9868704d066f89_4
Manufacturing margin	fill in the blank c9868704d066f89_6
		fill in the blank c9868704d066f89_8
		$fill in the blank c9868704d066f89_10
Variable cost of goods manufactured		fill in the blank c9868704d066f89_12
Contribution margin		$fill in the blank c9868704d066f89_14
Fixed costs:
	$fill in the blank c9868704d066f89_16
	fill in the blank c9868704d066f89_18	fill in the blank c9868704d066f89_19
Operating income		$fill in the blank c9868704d066f89_20