Sims Company, a manufacturer of tablet computers, began operations on January 1, 2017. Its cost and sales information for this year follows.

Manufacturing costs
Direct materials	$	35	per unit
Direct labor	$	55	per unit
Overhead costs for the year
Variable overhead	$	4,200,000
Fixed overhead	$	6,300,000
Selling and administrative costs for the year
Variable	$	750,000
Fixed	$	4,250,000
Production and sales for the year
Units produced		105,000	units
Units sold		75,000	units
Sales price per unit	$	350	per unit

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

Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statement under absorption costing for external reporting. For its first month of operations, 350 bikes were produced and 225 were sold; this left 125 bikes in ending inventory. The income statement information under variable costing follows.

Sales (225 $1,675)	$	376,875
Variable product cost (225 $700)		157,500
Variable selling and administrative expenses (225 $55)		12,375
Contribution margin		207,000
Fixed overhead cost		63,000
Fixed selling and administrative expense		80,000
Net income	$	64,000

1. Prepare this company's income statement for its first month of operations under absorption costing. (Round your intermediate calculations to the nearest whole dollar.)