Sims Company, a manufacturer of tablet computers, began operations on January 1, 2015. Its cost and sales information for this year follows. Manufacturing costs Direct materials Direct labor Overhead costs for the year Variable overhead Fixed overhead Selling and administrative costs for the year Variable Fixed Production and sales for the year Units produced Units sold Sales price per unit 60 69 $ 30 per unit 50 per unit $2,100,000 $ 8,400,000 $ 725,000 $4,750,000 89 $ 105,000 units 75,000 units 350 per unit 1. Prepare an income statement for the year using variable costing. SIMS COMPANY Variable Costing Income Statement Net income (loss) 2. Prepare an income statement for the year using absorption costing. SIMS COMPANY Absorption Costing Income Statement Net income (loss) 3. Under what circumstance(s) is reported income identical under both absorption costing and variable costing? O Production is greater than sales and inventory levels decrease Production equals sales and there is no beginning finished goods inventory Production is less than sales and inventory levels decrease Incomes of absorption costing and variable costing will never be identical Production is greater than sales and inventory levels increase