Wu Equipment Company manufactures and distributes industrial air compressors. The following data are available for the year ended December 31, 2020. The company had no beginning inventory. In 2020, it produced 1,500 units but sold only 1,200 units. The unit selling price was $4,500. Costs and expenses were as follows:

Variable cost per unit

Direct material = $800

Direct labour = 1,500

Variable manufacturing overhead = 300

Variable selling and administrative expenses = 70

Annual fixed cost and expenses

Fixed manufacturing overhead = $1,200,000

Selling and administrative expenses = 100,000

Prepare 2020 income statement for Wu Company using variable costing.