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Adria Lopez expected sales of her line of computer workstation furniture to equal 300 workstations (at a sales price of $3,200) for 2014. The workstations' manufacturing costs include the following. Direct materials $ 760 per unit Direct labor $ 390 per unit Variable overhead $ 70 per unit Fixed overhead $ 24,000 per year The selling expenses related to these workstations follow. Variable selling expenses $ 35 per unit Fixed selling expenses $ 3,400 per year Adria is considering how many workstations to produce in 2014. She is confident that she will be able to sell any workstations in her 2014 ending inventory during 2015. However, Adria does not want to overproduce as she does not have sufficient storage space for many more workstations. Required: 1. Complete the following income statements using absorption costing. Production Volume Cost of Goods Sold: 300 Workstations 320 Workstations Cost of goods sold per unit Number of workstations sold Total cost of goods sold SUCCESS SYSTEMS Absorption Costing Income Statements Production Volume Sales Volume - 300 Workstations 300 Workstations 320 Workstations 0 0 $0 $0 Under absorption costing, can the difference between production volume and sales volume affect the reported net income (loss)? 2. Complete the following income statements using variable costing. SUCCESS SYSTEMS Variable Costing Income Statements Production volume (units) 300 Workstations 320 Workstations Sales volume (units) 300 Workstations 300 Workstations Sales 0 0 Net income (loss) $0 $0 Under variable costing, can a company increase its net income by increasing production?

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