Use the following data for the fiscal year:

Sales Price	$30
Variable manufacturing expenses	$10 per unit
Fixed overhead	$180,000
Variable operating expenses	$3 per unit
Fixed operating expenses	$400,000

Units sold = 50,000

Units produced = 60,000

Note: Variable manufacturing expenses consist of direct materials used, direct labor and variable overhead

REQUIRED:

1. Prepare the income statement under absorption costing.

2. Prepare the contribution margin statement under variable costing.