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 Month Ended January 31, 20--
Sales		$
Cost of goods sold:
	$
Cost of goods sold
Gross profit		$
Less selling and administrative expenses
Income from operations		$

b. Prepare an income statement using variable costing.

Townsend Co.
Variable Costing Income Statement
For Month Ended January 31, 20--
		$
Variable cost of goods sold:
	$
		$
		$
Fixed costs:
	$
Income from operations		$