Thwart Products Inc. produces smart phones. The company has no finished goods inventory at the beginning of year 1. The following information pertains to Thwart Products Inc.

Thwart Products Inc. produces smart phones. The company has no finished goods inventory at the beginning of year 1. The following information pertains to Thwart Products Inc. Annual production (units) 160,000 Sales price per unit $ 300 Variable production cost per unit: Direct materials 80 Direct labor $ 70 Manufacturing overhead $ 60 Fixed production costs $ 260,000 Variable selling and admin cost per unit Fixed selling and admin costs per year $ 16 $ 310,000 All 160,000 units produced during year 1 were sold during year 1. Required: A. Prepare a traditional income statement assuming the company uses absorption costing. B. Prepare a contribution margin income statement assuming the company uses variable costing. Your answers to this open-ended assignment should be placed in the space below this line. A Absorption Costing Income Statement Sales Cost of goods sold Gross margin Variable selling and admin costs Fixed selling and admin costs Total selling and admin costs Operating profit B Variable Costing Income Statement Sales Variable costs: Variable production costs Variable selling and admin costs Total variable costs Fixed costs: Fixed Production costs Fixed Selling and Admin costs Total Fixed costs Operating profit