Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. 30 per unit 50 per unit 3e per unit $7,350, eee (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, eee $4,500,000 105,eee units 75,880 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 27,000,000 Less: Variable costs Direct materials 2,250,000 3,750,000 Direct labor Variable overhead costs Variable selling and administrative expenses 775,000 6,775,000 17,075,000 X Total variable costs Contribution margin Less: Fixed expenses Fixed selling and administrative costs Fixed overhead costs 4,500,000 7,350,000 Total fixed expenses Net income (loss) 11,850,000 $ 5,225,000 Absorption Costing Income Statement Sales Less: Cost of goods sold $ 27,000,000 Direct materials 2,250,000 3,750,000 Direct labor Variable overhead costs Fixed overhead costs 6,000,000 10,500,000 Cost of goods sold Gross margin Selling general and administrative expenses Fixed selling and administrative costs Variable selling and administrative expenses 4,500,000 Ol 775.000 Total selling, general and administrative expenses Net income (loss) 5,275,000 $ 5,225,000 X