Please show work

Jellison Company had the following operating data for its first two years of operations:

Variable costs per unit:
Direct materials		4.00
Direct labor		$2.90
Variable overhead		1.50
Fixed costs per year:
Overhead		180,000
Selling and administrative		70,350

Jellison produced 90,000 units in the first year and sold 80,000. In the second year, it produced 80,000 units and sold 90,000 units. The selling price per unit each year was $12. Jellison uses an actual costing system for product costing.

Required:

1. Prepare income statements for both years using absorption costing. If an amount is zero, enter "0".

Jellison Company Absorption-Costing Income Statement For Years 1 and 2

	Year 1	Year 2
Sales
Less: Cost of goods sold
Gross profit
Less: Fixed selling and administrative expenses
Operating income
Cost of goods sold:
Beginning inventory
Cost of goods manufactured
Goods available for sale
Less: Ending inventory
Cost of goods sold

Has firm performance, as measured by income, improved or declined from Year 1 to Year 2?

2. Prepare income statements for both years using variable costing. If an amount is zero, enter "0".

Jellison Company Variable-Costing Income Statement For Years 1 and 2

	Year 1	Year 2
Sales
Less: Variable cost of goods sold
Contribution margin
Less:
Fixed overhead
Fixed selling and administrative expenses
Operating income
Variable cost of goods sold:
Beginning inventory
Variable cost of goods manufactured
Goods available for sale
Less: Ending inventory
Cost of goods sold

Has firm performance, as measured by income, improved or declined from Year 1 to Year 2?

3. Which method do you think most accurately measures firm performance?