Randy Company has obtained the following data for the first year of operations:
Sales $2,868,750
Direct materials and labor $1,125,000
Variable manufacturing overhead $431,250
Fixed manufacturing overhead $656,250
Variable selling expenses $337,500
Fixed selling expenses $131,250
Units produced 125,000
Units sold 112,500
Units expected to be produced 125,000
A) Using variable costing, prepare an income statement for the first year of operations. Assume budgeted fixed costs were equal to actual fixed costs.
B) Using absorption costing, prepare an income statement for the first year of operations. Assume budgeted fixed costs were equal to actual fixed costs.