Refer to Exercise. In Exercise, Larcker Manufacturing’s cost accountant has provided you with the following information for January operations:

Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21 per unit

Fixed manufacturing overhead costs . . . . . . . . . . . . . . . . $135,000

Sales price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $79 per unit

Variable manufacturing overhead . . . . . . . . . . . . . . . . . . $12 per unit

Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24 per unit

Fixed marketing and administrative costs . . . . . . . . . . . . $117,000

Units produced and sold . . . . . . . . . . . . . . . . . . . . . . . . . 30,000

Variable marketing and administrative costs . . . . . . . . . . $5 per unit

Required

Prepare:

a. A gross margin income statement.

b. A contribution margin income statement.