Overton Company produced 80,000 units last year. The company sold 79,000 units and there was no beginning inventory. The company chose practical activity at 80,000 units to compute its predetermined rate. Manufacturing costs are as follows:

Direct materials $596,000

Direct Labor $104,000

Variable Overhead $88,000

Fixed Overhead $228,000

Assume the sales price per unit is $18. Assume variable selling expenses are $1 per unit sold. Assume fixed selling and administrative expenses total $120,000.

REQUIRED: Prepare an Absorption-Costing Income Statement down to Operating Income (just like your Textbook does). Then prepare a Variable-Costing Income Statement in proper format down to Operating Income (just like your Textbook does). Note this exercise involves a situation where more units were made than sold.