Lawn RX, Inc. prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Lawn RX provides a quarterly lawn care service that is sold for $185. The variable and fixed cost data are as follows:

Direct labor				$100.00
Overhead
Variable cost per unit				$31.00
Fixed cost				$100,000
Marketing, general and administrative
Variable cost (per service contract completed)				$32.00
Administrative expenses (fixed- per month)				$42,000

During 2016, 10,000 service contracts were signed and 9,500 service contracts were completed. Lawn RX had no service contracts at the beginning of the year.

a. Calculate reported income for management. Do not use negative signs with any answers.

Absorption Costing Income Statement
Sales $
Cost of Goods Sold:
Beginning Inventory. $
Variable Costs. $
Fixed Cost $
Less: Ending Inventory $
Cost of Goods Sold $
Answer $
Answer $
Administrative expense $
Net Income $

b. Calculate reported income for the bank. Do not use negative signs with any answers.

Variable Costing Income Statement
Sales $
Cost of Goods Sold:
Beginning Inventory $
Variable Costs $
answer $
Variable cost of goods sold $
answer $
answer $
Fixed costs:
answer $
Administrative Expense $
Total Fixed Cost $
Net Income $