Rey Company’s single product sells at a price of $222 per unit. Data for its single product for its first year of operations follow.
Direct materials $ 26 per unit
Direct labor $ 34 per unit
Overhead costs
Variable overhead $ 12 per unit
Fixed overhead per year $ 364,000 per year
Selling and administrative expenses
Variable $ 24 per unit
Fixed $ 212,000 per year
Units produced and sold 26,000 units
1. Prepare an income statement for the year using absorption costing
2. Prepare an income statement for the year using variable costing.