Exercise 19-9 Income statement under absorption costing and variable costing LO P1, P2 [The following information applies to the questions displayed below.) Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 42,000 units and sold 34,000 units at a price of $120 per unit. Manufacturing costs Direct materials per unit Direct labor per unit Variable overhead per unit Fixed overhead for the year Selling and administrative coata Variable selling and administrative cost per unit Fixed selling and administrative cost per year $ 48 $ 18 $ 6 $420,000 $ 9 $115,000 16. Assume the company uses absorption costing. Prepare its income statement for the year under absorption conting. COOL SKY Absorption Coating Income Statement Sales $ 4,000,000 2.292.000 Contribution margin 518,000! Fixed selling and administrative costs Total selling and administrative expenses Net income (loss) 518,000 1,774,000 $ 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing. 98 Answer is complete but not entirely correct. COOL SKY Variable Costing Income Statement Sales 4,080,000 Plus: Variable costs Variable product costs $ 2,448,000 Variable selling and administrative exponses 408,000 3 Variable overhead costs 3 2,856,000 Total variable costs 5,712,000 Contribution margin 1.224.000 Plus: Fixed expenses Fixed overhead costs 420,000 Fixed selling and administrative costs 110,000 Fixed overhead costs 530,000 1,060,000 Total fixed expenses $ 694,000 Net Income (loss)