Exercise 06-3 Income reporting under absorption costing and variable costing LO P2 Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. $ 35 per unit 55 per unit Manufacturing costs Direct materials Direct labor Overhead costs Variable Fixed Selling and administrative costs for the year Variable Fixed Production and sales for the year Units produced Units sold Sales price per unit 30 per unit $7,700,000 (per year) $ 775,000 $4,750,000 110,000 units 80,000 units 350 per unit 1. Prepare an income statement for the year using variable costing 2. Prepare an income statement for the year using absorption costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 0 17666 Saa2 Required 1 Required 2 Prepare an income statement for the year using variable costing. S 28,000,000 SIMS COMPANY Variable Costing Income Statement Sales Less: Variable costs Direct materials $ 2,800,000 Direct labor 4,400,000 Variable overhead costs Variable selling and administrative expenses 7.200,000 Total variable costs Contribution margin Less: Fixed expenses Fixed selling and administrative costs Fixed overhead costs Net income (loss) Required 2 > Il We Los below. Required 1 Requirid 2 Prepare an income statement for the year using absorption costing. SIMS COMPANY Absorption Costing Income Statement Sales $ 28,000,000 Less: Cost of goods sold Direct materials Direct labor Variable overhead costs Fixed overhead costs $ 2,800,000 4,400,000 7,200,000 Cost of goods sold Gross margin Selling general and administrative expenses Fixed selling and administrative costs Variable selling and administrative expenses Net income (loss)