Rey Companys single product sells at a price of $225 per unit. Data for its single product for its first year of operations follow.

Rey Company's single product sells at a price of $225 per unit. Data for its single product for its first year of operations follow. $ 29 per unit 37 per unit Direct materials Direct labor Overhead costs Variable overhead Fixed overhead per year Selling and administrative expenses Variable Fixed Units produced and sold $ 15 per unit $493,000 per year $ 27 per unit $218,000 per year 29,000 units 1. Prepare an income statement for the year using absorption costing 2. Prepare an income statement for the year using variable costing Absorption Costing Income Statement Sales 6,525,000 Less: Cost of goods sold Direct materials Direct labor Variable overhead costs Fixed overhead costs OOOO $ 841,000 1,073,000 435,000 491.000 X - 2,840,000 3,633,000 Cost of goods sold Gross margin Selling general and administrative expenses Fixed selling and administrative costs Variable selling and administrative expenses 218,000 Total selling, general and administrative expenses 218,000 Net income (loss) 3,465.000 * REY COMPANY Variable Costing Income Statement Sales 6,525,000 Less: Variable costs Direct materials Direct labor Variable overhead costs Variable selling and administrative expenses $ 841,000 1,073,000 435,000 783,000 3,132,000 3,393,000 Total variable costs Contribution margin Less: Fixed expenses Fixed selling and administrative costs Fixed overhead costs 218,000 Total fixed expenses 218,000 Net income (loss) 3,175.000