Sims Company began operations on January 1. Its cost and sales information for this year follow.

Direct materials	$ 35	per unit
Direct labor	$ 55	per unit
Variable overhead	$ 20	per unit
Fixed overhead	$ 8,000,000	per year
Variable selling and administrative expenses	$ 11	per unit
Fixed selling and administrative expenses	$ 5,000,000	per year
Units produced	100,000	units
Units sold	70,000	units
Sales price	$ 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.

Required 1 Required 2 Prepare an income statement for the year using variable costing. SIMS COMPANY Income Statement (Variable Costing) Sales Less: Variable expenses Direct materials Direct labor Variable cost of goods sold Gross Profit Income 0 0 Required 1 Required 2 Prepare an income statement for the year using absorption cos SIMS COMPANY Income Statement (Absorption Costing) 0 $ 0