Rey Companys single product sells at a price of $222 per unit. Data for its single product for its first year of operations follow.

Direct materials $ 26 per unit

Direct labor $ 34 per unit

Overhead costs

Variable overhead $ 12 per unit

Fixed overhead per year $ 364,000 per year

Selling and administrative expenses

Variable $ 24 per unit

Fixed $ 212,000 per year

Units produced and sold 26,000 units

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

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