Randy Company Has Obtained the Following Data for the First

Essay

Randy Company has obtained the following data for the first year of operations:
$\begin{array}{ll}\text { Sales }&\$2,868,750\\\text { Direct materials and labor }&\$1,125,000\\\text { Variable manufacturing overhead } & \$ 431,250 \\\text { Fixed manufacturing overhead } & \$ 656,250 \\\text { Variable selling expenses } & \$ 337,500 \\\text { Fixed selling expenses } & \$ 131,250 \\\text { Units produced } & 125,000 \\\text { Units sold } & 112,500 \\\text { Units expected to be produced } & 125,000\end{array}$
Required:
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.