Required Information Exercise 6-3 (Algo) Income statement under absorption costing and variable costing LO P1, P2 (The following information applies to the questions displayed below.) Cool Sky reports the following for its first year of operations. The company produced 42,000 units and sold 34,000 units at a price of $120 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 48 per unit $ 18 per unit 5.6 per unit $ 420,000 per year $10 per unit $ 120,990 per year Exercise 6-3 (Algo) Part 1b 1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing 4,080,000 Income Statement (Absorption Costing) Sales S Cost of goods sold Gross profit Selling and administrative expenses Income $ 4,080 000 4,080,000 ce Exercise 6-3 (Algo) Part 2b 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing. Income Statement (Variable Costing) Sales LessVariable expenses Variable cost of goods sold Variable selling and administrative expenses 340,000 340,000 Contribution margin Less Fixed expenses Fixed overhead costs Fixed selling and administrative costs Income