The chief executive officer of Acadia, Inc. attended a conference in which one of the sessions was devoted to variable costing. The CEO was impressed by the presentation and has asked that the following data of Acadia, Inc. be used to prepare comparative statements using variable costing and the company's absorption costing. The data follow:

Direct materials $99,000

Direct labor $126,000

Variable factory overhead 72,000

Fixed factory overhead 171,000

Fixed marketing and administrative expense 211,500

The factory produced 90,000 units during the period, and 78,750 units were sold for $787,500.

1. Prepare n income statement using variable costing.

2. Prepare n income statement using absorption costing. (Round unit costs to three decimal places.)