Exercise 19-7 (Algo) Income reporting under absorption costing and variable costing LO P2 Sims Company began operations on January 1. Its cost and sales information for this year follow. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses Units produced Units sold Sales price $ 35 per unit $ 55 per unit $20 per unit $ 8,400,000 per year $ 11 per unit $ 4,500,000 per year 105,000 units 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. 75,000 units $ 350 per unit Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the year using variable costing. SIMS COMPANY Income Statement (Variable Costing) Sales Less: Variable expenses Direct materials 26,250,000' Direct labor Variable selling and administrative expenses Contribution margin 2.450,000 3,850,000X 8,450,000 14,750,000 16,050,000 Less: Fixed expenses Fixed selling and administrative expenses Fixed overhead Fixed overhead Income 4,250,000 8,000,000 X 12,250,000 $3,800,000 Required 1 Required 2 >