Sims Company began operations on January $1.$ Its cost and sales information for this year follow.

Direct materials $$40$ per unit

Direct labor $$60$ per unit

Variable overhead $$30$ per unit

Fixed overhead $$7,000,000$ per year

Variable selling and administrative expenses $$11$ per unit

Fixed selling and administrative expenses $$4,250,000$ per year

Units produced $100,000$ units

Units sold $70,000$ units

Sales price $$350$ per unit

Required:

$1.$ Prepare an income statement for the year using variable costing.

$($Use cells A$4$ to C$12$ from the given information to complete this question. Negative amounts or amounts to be deducted should be input and displayed as negative values. All other answers should be input and displayed as positive values.$)$

SIMS COMPANY

Income Statement $($Variable Costing$)$

Direct materials $$2,800,000$

Plus: Cost of goods sold

Direct labor

Fixed selling and administrative expenses

Income $($loss$)$

$2.$ Prepare an income statement for the year using absorption costing.

$($Use cells A$4$ to C$12$ from the given information to complete this question. Negative amounts or amounts to be deducted should be input and displayed as negative values. All other answers should be input and displayed as positive values.$)$

SIMS COMPANY

Income Statement $($Absorption Costing$)$

Direct materials

Cost of goods sold

Selling and administrative expenses

Income