Rey Companys single product sells at a price of $234 per unit. Data for its single product for its first year of operations follow.

Direct materials	$	38	per unit
Direct labor	$	46	per unit
Overhead costs
Variable overhead	$	6	per unit
Fixed overhead per year	$	196,000	per year
Selling and administrative expenses
Variable	$	36	per unit
Fixed	$	236,000	per year
Units produced and sold		24,500	units

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

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