The following information is for Denver Cement for October:

Product selling price $20

Variable manufacturing cost $12

Variable selling and administrative cost $3

Fixed manufacturing costs $40,000

Fixed selling and administrative cost $30,000

Units sold $18,000

Units produced $20,000

1. Prepare a variable costing (contribution margin) income statement for October.

2. Prepare an absortion costing (GAAP) income statement for October.