Exercise 6-3 (Algo) Income statement under absorption costing and variable costing LO P1, P2 Cool Sky reports the following for its first year of operations. The company produced 42,000 units and sold 34,000 units at a price of $140 per unit.

1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing.

Required Information Exercise 6-3 (Algo) 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 for its first year of operations. The company produced 42,000 units and sold 34,000 units at a price of $140 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 60 per unit $ 22 per unit $ 8 per unit $504,880 per year $ 11 per unit $ 180,00 per year Exercise 6-3 (Algo) Part 1b 1b. Assume the company uses absorption costing. Prepare its Income statement for the year under absorption costing. Answer is complete but not entirely correct. Income Statement (Absorption Costing) Sales $ 4.780.000 Cost of goods sold 3.468,000 Gross profit 1.292.000 Selling and administrative expenses 374,000 Income $ 918.000