Summarized data for Walrus Co. for its first year of operations are: Sales (90,000 units) $5,400,000 1,728,000 Production Costs (108,000 units): Direct Material Direct Labor Manufacturing Overhead: Variable 1,296,000 810,000 Fixed 270,000 Selling and Administrative Expenses: Variable 234,000 396,000 Fixed A. Prepare an income statement under absorption costing. Walrus Co. Absorption Costing Income Statement Sales 5,400,000 Cost of Goods Sold: Direct Material Direct Labor Variable overhead Fixed Overhead Direct Material Miscellaneous expenses x Variable costs Fixed Overhead Net Income Feedback Check My Work A. Remember that absorption costing includes all costs necessary for production. Conversely B. Prepare an income statement under variable costing. Walrus Co. Variable Costing Income Statement Sales Variable Cost of Goods Sold: Direct Material Direct Labor Variable Overhead Variable costs x Miscellaneous Expenses x Fixed Expenses: Fixed Manufacturing Overhead Fixed Administrative Expenses Net Income