Wrap-It Company,a Manufacturer of Wrapping Paper,began Operations on June 1

Essay

Wrap-It Company,a manufacturer of wrapping paper,began operations on June 1 of the current year.During this time,the company produced 370,000 units and sold 310,000 units at a sales price of $50 per unit.Cost information for this period is shown in the following table:
$\begin{array}{ll}\text {Production costs}\\\text { Direct materials } & \$ 2.00 \text { per unit } \\\text { Direct labor } & \$ .80 \text { per unit } \\\text { Variable overhead } & \$ 814,000 \text { in total } \\\text { Fixed overhead } & \$ 481,000 \text { in total }\\\text { Non-production costs}\\\text { Variable selling and administrative}& \$ 78,000\text { in total}\\\text { Fixed selling and administrative }&\$ 210,000\text { in total}\end{array}$
a.Prepare Wrap-It's December 31^t income statement for the current year under absorption costing.
b.Prepare Wrap-It's December 31 income statement for the current year under variable costing.