SECTION C: PROBLEM QUESTIONS (20 points) commenced operations. It operated its results for 1. On July 1 of the current year, Townsend Co. c plant at 100% of capacity during July. The following data summarized the July 50,00 42,00 S18 per unit) July 31 $575,000 Variable Fixed Total S 35,00 500 Fixed Total (a) Prepare an income statement using absorption costing (b) Prepare an income statement using variable costing 2. Star Co. was organized on October 1 of the current year. Projected sales for the next three months are as follows: October $250,000 November 200,000 December 275,000 The company expects to sell 50% of its merchandise for cash. Of the sales on ac 30% are expected to be collected in the month of the sale and the remainder in the following month. Prepare a schedule indicating cash collections for October, November, and