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

Direct materials	$ 40	per unit
Direct labor	$ 60	per unit
Variable overhead	$ 30	per unit
Fixed overhead	$ 7,000,000	per year
Variable selling and administrative expenses	$ 11	per unit
Fixed selling and administrative expenses	$ 4,250,000	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.