Exercise $19-7($Algo$)$ Income reporting under absorption costing and variable costing LO P$2$

Sims Company began operations on January $1.$ Its cost and sales information for this year follow.

Direct materials $ $30$ per unit

Direct labor $ $50$ per unit

Variable overhead $ $30$ per unit

Fixed overhead $ $7,350,000$ per year

Variable selling and administrative expenses $ $11$ per unit

Fixed selling and administrative expenses $ $4,500,000$ per year

Units produced $105,000$ units

Units sold $75,000$ units

Sales price $ $360$ per unit

$1.$ Prepare an income statement for the year using variable costing.

$2.$ Prepare an income statement for the year using absorption costing