E10-2: Comparative income statements - variable and absorption costings

Using the information presented in E10-1, prepare a comparative income statements for March (a) under absorption costing and (b) under variable costing.

The following data came from the records for March:

Direct materials................................... $200,000

Direct labor......................................... $100,000

Variable factory overhead.................... $80,000

Fixed factory overhead....................... $60,000

Selling and administrative expenese.... $40,000

Units produced.................................. 25,000

Units sold......................................... 20,000

Selling price per unit.......................... $25

There were no beginning inventories and no ending work in process inventory.