E$11-31.$ Absorption and variable costing income statements A manufacturing company is contemplating switching from their current costing approach, variable costing, to absorption costing. Relevant data for the company in January $20$X$2$ is as follows.

$\backslash$table$[[$Selling price,$ $30/$unit$],[$Units produced,$40,000],[$Units sold,$30,000],[$Inventory as of $1/1/$X$2.,$None$],[$Direct materials.,$ $6/$unit$],[$Direct labor,$ $3/$unit$],[$Variable manufacturing ovorhead.,$ $2/$unit$],[$Variable selling and administrative expense.,$ $1/$unit$],[$Fixed selling and administrative expense,$ $75,000],[$Fixed manufacturing overhead.,$$160,000]]$

a$.$ Prepare a functional income statement for the year using absorption costing.

b$.$ Prepare a contribution income statement for the year using variable costing.