Waldron Company manufactures a single product that it sells for $20.00. The variable costs to manufacture one unit are as follows: direct materials, $5.00; direct labor, $4.00; and manufacturing overhead, $2.50. Total fixed manufacturing costs amount to $150,000 per year. The variable operating costs of the company are: variable selling costs, $2.50 per unit sold; variable administrative costs, $1.50 per unit sold. The fixed operating costs are: $200,000 selling and $250,000 administrative.The company produced 300,000 units during the year and sold 270,000 of the units produced. There was no beginning inventory. Estimated and actual fixed manufacturing costs were the same for the year.
Required:
Required:
(1) Prepare an income statement for the year using full absorption costing.
(2) Prepare an income statement for the year using variable costing.
