Question 5 (Variable Costing) Wu Equipment Company manufactures and distributes industrial air compressors. The following data are available for the year ended December 31, 2020. The company had no beginning inventory. In 2020, it produced 1,500 units but sold only 1,200 units. The unit selling price was $4,500. Costs and expenses were as follows: Variable costs per unit Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative expenses Annual fixed costs and expenses Fixed manufacturing overhead Selling and administrative expenses $ 800 1,500 300 70 $1,200,000 100,000 Prepare a 2020 income statement for Wu Company using variable costing. [5 marks]