Traditional Income Statement vs. Cost Volume Profit (CVP) Income Statement

Rey Companys single product sells at a price of $216 per unit. Data for its single product for its first year of operations follow.

Direct materials	$	20	per unit
Direct labor	$	28	per unit
Overhead costs
Variable overhead	$	6	per unit
Fixed overhead per year	$	160,000	per year
Selling and administrative expenses
Variable	$	18	per unit
Fixed	$	200,000	per year
Units produced and sold		20,000	units

1.	1. Prepare an income statement for the year using the traditional income statement. 2. Prepare an income statement for the year using the cost volume profit income statement. 2.