Exercise 19-3 Income reporting under absorption costing and variable costing LOP2 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 35 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 57,350,000 per year) $ 725,000 $4,000,000 105,000 units 75,000 units 350 per unit 5 1. Prepare an income statement for the year using variable costing 2. Prepare an income statement for the year using absorption costing $ 26,250,000 SIMS COMPANY Variable Costing Income Statement Sales Less: Variable costs Direct materials $ 2,625,000 Variable overhead costs 2,250,000 Direct labor 4,125,000 Variable selling and administrative expenses 725,000 9,725,000 Total variable costs Contribution margin Less: Fixed expenses Fixed selling and administrative costs Fixed overhead costs 4,000,000 7,350,000 11,350,000 Total fixed expenses Net income (loss) SIMS COMPANY Absorption Costing Income Statement Net income (loss)