Problem  - On January 1 of the current year, C. F. Hartley Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January:

                                              Units

Production

Sales ($18 per unit)                 50,000

Inventory, January 31              42,000

                                              8,000

Total Cost or Expense

Manufacturing costs:

Variable                                  $575,000

Fixed                                      75,000

Total                                       $ 650,000

Selling and administrative expenses:

Variable                                  $ 33,600

Fixed                                      10,500

Total                                      $ 44,100

(a) Prepare an income statement in accordance with absorption costing.

(b) Prepare an income statement in accordance with variable costing.