1.Prepare the current-year income statement for the company using variable costing.

2. Prepare the current-year income statement for the company hsing absorption costing.

! Required information [The following information applies to the questions displayed below.] Oak Mart, a producer of solid oak tables, reports the following data from its second year of business. Sales price per unit Units produced this year Units sold this year Units in beginning-year inventory Beginning inventory costs Variable (3,000 units $135) Fixed (3,000 units * $80) Total Manufacturing costs this year Direct materials Direct labor Overhead costs this year Variable overhead Fixed overhead Selling and administrative costs this year. Variable Fixed $ 320 per unit 405,000 240,000 $ 645,000 $ 115,000 units 118,000 units 3,000 units 40 per unit 62 per unit $3,220,000 $7,400,000 $1,416,000 4,600,000 Sales Less: Variable costs Beginning inventory: Variable costs Manufacturing costs this year Direct materials Direct labor Variable overhead costs Total variable costs available Less: Ending finished goods inventory Variable cost of goods sold Variable selling and administrative expenses Total variable costs Contribution margin OAK MART COMPANY Variable Costing Income Statement Less: Fixed expenses Fixed selling and administrative costs Fixed overhead costs Total fixed expenses Net income (loss) $ 405,000 4,600,000 7,130,000 3,220,000 15,355,000 0 $ 15,355,000 1,416,000 $4,600,000 7,400,000 $ 37,760,000 16,771,000 12,000,000 0 Required information Sales Less: Cost of goods sold Beginning inventory Manufacturing costs this year Direct materials Direct labor Variable overhead costs Net income (loss) OAK MART COMPANY Absorption Costing Income Statement Fixed costs added to(subtracted from) inventory 645,000 $ 37,760,000 645,000