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 $110 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 42 per unit $ 16 per unit $ 5 per unit $ 378,000 per year $ 11 per unit $ 110,000 per year Exercise 6-3 (Algo) Part 2b 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing. Income Statement (Variable Costing) Sales $ 3.740.000 Less: Variable expenses Variable cost of goods sold Variable selling and administrative expenses Contribution margin Less: Fixed expenses Fixed overhead Fixed selling and administrative expenses Income 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 $110 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 42 per unit $ 16 per unit $ 5 per unit $ 378,000 per year $ 11 per unit $ 110,000 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. $ 3,740,000 Income Statement (Absorption Costing) Sales Cost of goods sold Gross profit Selling and administrative expenses Income 3,740,000 $ 3,740,000