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Exercise 19-3 Income reporting under absorption costing and variable costing LO P2 Sims Company, a manufacturer of tablet computers, began operations on January 1, 2017. Its cost and sales information for this year follows. Nanufacturing costs Direct materials Direct labor Overhead costs for the year 40 per unit 60 per unit Variable overhead $3,000,000 $7,000,000 Fixed overhead Selling and administrative costs for the year Variable Fixed $770,000 $4,250,000 Production and sales for the year Unite produced Units sold Sales price per unit 100,000 unite 70,000 unite 350 per unit 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. 3. Under what circumstance(s) is reported income identical under both absorption costing and variable costing? Required 1 Required 2 Required 3 Prepare an income statement for the year using variable costing. SIMS COMPANY Variable Costing Income Statement Sales Less: Variable costs Direct materials Direct labor Variable overhead costs Variable selling and administrative expenses 0 Net income (loss) Required 3 Prepare an income statement for the year using absorption costing. SIMS COMPANY Absorption Costing Income Statement Required 1 Required 2 Net income (loss) Required 1 Required 2Required 3 Under what circumstance(s) is reported income identical under both absorption costing and variable costing? Reported income identical under both