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	$	40	per unit
Direct labor	$	60	per unit
Overhead costs for the year
Variable overhead	$	3,000,000
Fixed overhead	$	7,000,000
Selling and administrative costs for the year
Variable	$	770,000
Fixed	$	4,250,000
Production and sales for the year
Units produced		100,000	units
Units sold		70,000	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.