Variable and Absorption Costing Summarized data for 2016 (the first year of operations) for Gorman Products, Inc., are as follows: $3,000,000 Sales (75,000 units) Production costs (80,000 units) Direct material Direct labor Manufacturing overhead: Variable Fixed Operating expenses: Variable Fixed Depreciation on equipment Real estate taxes Personal property taxes (inventory & equipment) Personnel department expenses Sales Cost of Goods Sold: a. Prepare an income statement based on full absorption costing. Only use a negative sign with your answer for net income (loss), if the answer represents a net loss. Otherwise, do not use negative signs with any answers. Round answers to the nearest whole number, when applicable. Beginning Inventory Direct materials Direct labor Absorption Costing Income Statement Less: Ending Inventory Cost of Goods Sold Net Income (Loss) 4 ( 880,000 720,000 544,000 320,000 $ 168,000 240,000 60,000 18,000 28,800 30,000 $ $ b. Prepare an income statement based on variable costing.

Variable and Absorption Costing agolicabie. 6. Prepare an liscome vatenent based on valiable costing asplicatile. Qetermine the spparent peafit or loss on the spectal order based solely on these data Select tre ench opproprate staternent