Rey Companys single product sells at a price of $224 per unit. Data for its single product for its first year of operations follow.

Direct materials	$	28	per unit
Direct labor	$	36	per unit
Overhead costs
Variable overhead	$	14	per unit
Fixed overhead per year	$	448,000	per year
Selling and administrative expenses
Variable	$	26	per unit
Fixed	$	216,000	per year
Units produced and sold		28,000	units

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

REY COMPANY
Absorption Costing Income Statement
Sales
Less: Variable costs
Direct materials
Direct labor
Variable overhead costs
Variable selling and administrative expenses
Total variable costs
Contribution margin
Selling general and administrative expenses
Fixed selling and administrative costs
Fixed overhead costs
Net income (loss)

*Not sure if the entries are correct above ^.

Prepare an income statement for the year using variable costing.

REY COMPANY
Variable Costing Income Statement
		0
		0
Net income (loss)