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Toy Centre Inc. sells Frisbees. In 2020, the company produced 3,046,000 units but sold only 2,537,000 units. The unit selling price was $1.50 per Frisbee. The company had no beginning inventory. Costs and expenses for the year ended December 31, 2020 were as follows:

Variable costs per unit:
Direct materials		$0.49
Direct labour		0.09
Variable manufacturing overhead		0.21
Variable selling and administrative expenses		0.26
Annual fixed costs and expenses:
Manufacturing overhead		$395,980
Selling and administrative expenses		341,000

(a)

Prepare an income statement using absorption costing.

Toy Centre Inc. Income Statement December 31, 2020For the Month Ended December 31, 2020For the Year Ended December 31, 2020 Absorption Costing
Net Income / (Loss)Cost of Goods SoldVariable CostsContribution MarginSalesGross ProfitFixed Costs		$
Fixed CostsGross ProfitCost of Goods SoldContribution MarginNet Income / (Loss)Variable CostsSales
SalesContribution MarginCost of Goods SoldNet Income / (Loss)Gross ProfitFixed CostsVariable Costs
Net Income / (Loss)Fixed Selling and Administrative ExpensesVariable Selling and Administrative ExpensesFixed Manufacturing OverheadVariable Cost of Goods SoldVariable Costs of Goods ManufacturedVariable Costs of Goods Available for Sale
Net Income / (Loss)Variable Cost of Goods SoldVariable Costs of Goods Available for SaleVariable Costs of Goods ManufacturedFixed Selling and Administrative ExpensesFixed Manufacturing OverheadVariable Selling and Administrative Expenses
SalesNet Income / (Loss)Gross ProfitCost of Goods SoldFixed CostsContribution MarginVariable Costs		$

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(b)

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