Rey Companys only product sells for $216 per unit. Data for its first year of operations follow.

Direct materials	$ 20	per unit
Direct labor	$ 28	per unit
Variable overhead	$ 6	per unit
Fixed overhead	$ 160,000	per year
Variable selling and administrative expenses	$ 18	per unit
Fixed selling and administrative expenses	$ 200,000	per year
Units produced and sold	20,000	units

1. Prepare an income statement for the year using absorption costing 2. Prepare an income statement for the year using variable costing.