Sims Company began operations on January 1. Its cost and sales information for this year follow. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses Units produced Units sold Sales price $ 35 per unit $ 55 per unit $20 per unit $ 8,400,000 per year $ 11 per unit $ 4,750,000 per year 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. 105,000 units 75,000 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the year using variable costing. Sales Less: Cost of goods sold Direct materials Direct labor Fixed overhead Contribution margin Less: Fixed expenses SIMS COMPANY Income Statement (Variable Costing) Fixed selling and administrative expenses Fixed overhead Income < Required 1 Required 2 > 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the year using absorption costing. SIMS COMPANY Income Statement (Absorption Costing) $ 0 < Required 1 Required 2 > Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced 1,075 kayaks and sold 825 at a price of $1,075 each. At year-end, the company reported the following income statement information using absorption costing. Sales (825 $1,075) Cost of goods sold (825 x $425) Gross profit Selling and administrative expenses Income $ 886,875 350,625 536,250 250,000 $ 286,250 Additional Information a. Product cost per kayak under absorption costing totals $425, which consists of $325 in direct materials, direct labor, and variable overhead costs and $100 in fixed overhead cost. Fixed overhead of $100 per unit is based on $107,500 of fixed overhead per year divided by 1,075 kayaks produced. b. The $250,000 in selling and administrative expenses consists of $105,000 that is variable and $145,000 that is fixed. Prepare an income statement for the current year under variable costing. Selling and administrative expenses Income Additional Information 250,000 $ 286,250 a. Product cost per kayak under absorption costing totals $425, which consists of $325 in direct materials, direct labor, and variable overhead costs and $100 in fixed overhead cost. Fixed overhead of $100 per unit is based on $107,500 of fixed overhead per year divided by 1,075 kayaks produced. b. The $250,000 in selling and administrative expenses consists of $105,000 that is variable and $145,000 that is fixed. Prepare an income statement for the current year under variable costing. Income KENZI Income Statement (Variable Costing)