The following data relate to Socks Company for the year ended 2010 December 31:
|
Cost of production: |
|
|
Direct materials (variable) |
$360,000 |
|
Direct labor (variable) |
504,000 |
|
Manufacturing overhead: |
|
|
Variable |
180,000 |
|
Fixed |
360,000 |
|
Sales commissions (variable) |
108,000 |
|
Sales salaries (fixed) |
72,000 |
|
Administrative expenses (fixed) |
144,000 |
|
Units produced |
150,000 |
|
Units sold (at $18 each) |
120,000 |
|
Beginning inventory, 2010 January 1 |
-0- |
There were no beginning inventories. Assume direct materials and direct labor are variable costs. Prepare two income statements—a variable costing income statement and an absorption costing income statement.