Stonehenge Inc APrepare Stonehenge's December 31 Income Statement for the Current Year

Essay

Stonehenge Inc., a manufacturer of landscaping blocks, began operations on April 1 of the current year.During this time, the company produced 750,000 units and sold 720,000 units at a sales price of $9 per unit.Cost information for this period is shown in the following table:
$\begin{array}{ll}\text { Production costs }\\\quad\text { Direct materials } & \$ 1.80 \text { per unit } \\\quad\text { Direct labor } & \$ 30 \text { per unit } \\\quad\text { Variable overhead } & \$ 495,000 \text { in tota } \\\quad\text { Fixed overhead } & \$ 450.000 \text { in tota }\\\text { Nonproduction costs }\\\quad\text {Variable selling and administrative }& \$ 18,000 \text {in total}\\\quad\text {Fixed selling and administrative }& \$ 53,000 \text { in total}\\\end{array}$ a.Prepare Stonehenge's December 31 income statement for the current year under absorption costing.
b.Prepare Stonehenge's December 31 income statement for the current year under variable costing.