Sims Company, a manufacturer of tablet computers, beganoperations on January 1, 2017. Its cost and sales information forthis year follows. Manufacturing costs Direct materials $ 40 perunit Direct labor $ 60 per unit Overhead costs for the yearVariable overhead $ 4,400,000 Fixed overhead $ 6,600,000 Sellingand administrative costs for the year Variable $ 750,000 Fixed $4,250,000 Production and sales for the year Units produced 110,000units Units sold 80,000 units Sales price per unit $ 350 perunit
1. Prepare an income statement for the year using variablecosting. 2. Prepare an income statement for the year usingabsorption costing. 3. Under what circumstance(s) is reportedincome identical under both absorption costing and variablecosting?
