Watches Inc. produces and sells watches for $32.00 per unit. For the Year 1, Watches Inc. produced 56,400 units and sold 51,500 units. In Year 2, Watches Inc. produced 50,000 watches and sold 53,000 for the year. Other information for Years 1 and 2 includes:

Direct Material costs $10.00 per unit

Direct Labor costs $ 6.50 per unit

Variable Manufacturing costs $ 4.00 per unit

Variable Marketing costs $ 1.60 per unit

Fixed Manufacturing costs $211,500

Fixed Marketing costs $ 75,000

Year 1 Beginning inventory 0 units

Using Full (Absorption) Costing and the prepare an Absorption Format Income Statements resulting in Operating Income for Years 1 and Year 2 using the information above.