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:
$\begin{array}{ll}\text { Production costs }\\\text { Direct materials } & \$ 1.80 \text { per unit } \\\text { Direct labor } & \$ .30 \text { per unit } \\\text { Variable overhead } & \$ 495,000 \text { in tota } \\\text { Fixed overhead } & \$ 450,000 \text { in total }\\\text { Nonproduction costs }\\ \text {Variable selling and administrative } &\$18,000 \text { in total} \\ \text { Fixed selling and administrative } & \text { \$53,000 in total} \\\end{array}$

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.