Prepare an income statement for the year ended December 31, through the gross profit for Baxter Company using the following information. Baxter Company sold 8,600 units at $125 per unit. Normal production is 9,000 units. (Do not round fixed overhead rate calculation when determining fixed factory overhead volume variance.)

Standard: 5 yards per unit at $6.30 per yard

Standard: 2.25 hours per unit at $15.00

Standard: variable overhead $1.05 per unit

Standard: fixed overhead $211,500 (budgeted and actual amount)

Actual yards used: 43,240 yards at $6.25 per yard

Actual hours worked: 19,100 at $14.90 per hour

Actual total factory overhead: $235,500