Sims Company, a manufacturer of tablet computers, began operations on January 1, 2017. Its cost and sales information for this year follows. $ $ 40 per unit 60 per unit $3,000,000 $7,000,000 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 $ 770,000 $ 4,250,000 100,000 units 70,000 units 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. 3. Under what circumstance(s) is reported income identical under both absorption costing and variable costing? SIMS COMPANY Variable Costing Income Statement 24,500,000 Sales Less: Variable costs Direct materials Direct labor labor 2,800,000 4,200,000 2,100,000 770,000 Variable overhead costs Variable selling and administrative expenses 9,870,000 14,630,000 Total variable costs Contribution margin Less: Fixed expenses Fixed selling and administrative costs Fixed overhead costs 4,250,000 7,000,000 11,250,000 Total fixed expenses Net income (loss) SIMS COMPANY Absorption Costing Income Statement Sales 24,500,000 Less: Cost of goods sold Direct materials Direct labor 2,800,000 4,200,000 2,100,000 4,900,000 Variable overhead costs Fixed overhead costs USIS Cost of goods sold Gross margin Selling general and administrative expenses 14,000,000 10,500,000 Variable overhead costs Net income (loss) Under what circumstance(s) is reported income identical under both absorption costing and variable costing? Reported income identical under both