Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. follows. A VA $ $ 35 per unit 55 per unit 20 per unit $8,800,000 (per year) Manufacturing costs Direct materials Direct labor Overhead costs Variable Fixed Selling and administrative costs for the year Variable Fixed Production and sales for the year Units produced Units sold Sales price per unit $ 775,000 $4,750,000 110,000 units 80,000 units 360 per unit 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. Variable Costing Income Statement Sales $ 28,800,000 Less: Variable costs Direct materials Direct labor Variable overhead costs Variable selling and administrative expenses $ 2,800,000 4,400,000 1,600,000 775,000 Total variable costs 9,575,000 19,225,000 Contribution margin Less: Fixed expenses Fixed selling and administrative costs Fixed overhead costs 4.750,000 8,800,000 Total fixed expenses Net income (loss) 13,550.000 $ 5 675,000 Absorption Costing Income Statement Sales $28,800,000 Less: Cost of goods sold Direct materials Direct labor Variable overhead costs Fixed overhead costs $ 2,800,000 4,400,000 1,600,000 775,000 X 9,575,000 0 X Cost of goods sold Gross margin Selling general and administrative expenses Fixed selling and administrative costs Variable selling and administrative expenses 0 X 0 X 0 Net income (loss) $ 0 X