Jellison Company had the following operating data for its first two years of operations:

Variable costs per unit:
Direct materials		4.00
Direct labor		$2.80
Variable overhead		1.50
Fixed costs per year:
Overhead		180,000
Selling and administrative		70,700

Jellison produced 90,000 units in the first year and sold 80,000. In the second year, it produced 80,000 units and sold 90,000 units. The selling price per unit each year was $12. Jellison uses an actual costing system for product costing.

Required:

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1. Prepare income statements for both years using absorption costing. If an amount is zero, enter "0".

Jellison Company Absorption-Costing Income Statement For Years 1 and 2

	Year 1	Year 2
Beginning inventoryCost of goods manufacturedGoods available for saleFixed selling and administrative expensesOperating incomeSalesSales	$Sales	$Sales
Less: Beginning inventoryLess: Cost of goods manufacturedLess: Goods available for saleLess: Cost of goods soldLess: Ending inventoryLess: Fixed selling and administrative expensesLess: SalesLess: Cost of goods sold	Less: Cost of goods sold	Less: Cost of goods sold
Gross profit	$fill in the blank 7acf1c03dfdb04a_7	$fill in the blank 7acf1c03dfdb04a_8
Less: Beginning inventoryLess: Cost of goods manufacturedLess: Cost of goods soldLess: Goods available for saleLess: Ending inventoryLess: Fixed selling and administrative expensesLess: SalesLess: Fixed selling and administrative expenses	Less: Fixed selling and administrative expenses	Less: Fixed selling and administrative expenses
Operating income	$fill in the blank 7acf1c03dfdb04a_12	$fill in the blank 7acf1c03dfdb04a_13
Cost of goods sold:
Beginning inventoryCost of goods soldEnding inventoryFixed selling and administrative expensesGoods available for saleSalesBeginning inventory	$Beginning inventory	$Beginning inventory
Cost of goods manufacturedCost of goods soldEnding inventoryFixed selling and administrative expensesGoods available for saleSalesCost of goods manufactured	Cost of goods manufactured	Cost of goods manufactured
Beginning inventoryCost of goods manufacturedCost of goods soldEnding inventoryFixed selling and administrative expensesGoods available for saleGross profitSalesGoods available for sale	$Goods available for sale	$Goods available for sale
Less: Beginning inventoryLess: Cost of goods manufacturedLess: Cost of goods soldLess: Ending inventoryLess: Fixed selling and administrative expensesLess: Goods available for saleLess: SalesLess: Ending inventory	Less: Ending inventory	Less: Ending inventory
Cost of goods sold	$fill in the blank 7acf1c03dfdb04a_26	$fill in the blank 7acf1c03dfdb04a_27

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Use the GAAP format income statement.

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Has firm performance, as measured by income, improved or declined from Year 1 to Year 2?

ImprovedDeclinedImproved

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Compare income for years 1 and 2.

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2. Prepare income statements for both years using variable costing. If an amount is zero, enter "0".

Jellison Company Variable-Costing Income Statement For Years 1 and 2

	Year 1	Year 2
Beginning inventoryFixed overheadFixed selling and administrative expensesGoods available for saleEnding inventoryVariable cost of goods soldSalesVariable cost of goods manufacturedSales	$Sales	$Sales
Less: Beginning inventoryLess: Fixed overheadLess: Fixed selling and administrative expensesLess: Goods available for saleLess: Ending inventoryLess: Variable cost of goods soldLess: SalesLess: Variable cost of goods manufacturedLess: Variable cost of goods sold	Less: Variable cost of goods sold	Less: Variable cost of goods sold
Contribution margin	$fill in the blank 193d5efd9fd605a_7	$fill in the blank 193d5efd9fd605a_8
Less:
Beginning inventoryFixed overheadGoods available for saleEnding inventoryVariable cost of goods soldSalesVariable cost of goods manufacturedFixed overhead	Fixed overhead	Fixed overhead
Beginning inventoryFixed selling and administrative expensesGoods available for saleEnding inventoryVariable cost of goods soldSalesVariable cost of goods manufacturedFixed selling and administrative expenses	Fixed selling and administrative expenses	Fixed selling and administrative expenses
Operating income	$fill in the blank 193d5efd9fd605a_15	$fill in the blank 193d5efd9fd605a_16
Variable cost of goods sold:
Beginning inventoryCost of goods soldEnding inventoryFixed overheadFixed selling and administrative expensesGoods available for saleSalesBeginning inventory	$Beginning inventory	$Beginning inventory
Fixed overheadFixed selling and administrative expensesGoods available for saleEnding inventoryVariable cost of goods soldSalesVariable cost of goods manufacturedGoods available for sale	Goods available for sale	Goods available for sale
Beginning inventoryEnding inventoryFixed overheadFixed selling and administrative expensesGoods available for saleSalesVariable cost of goods manufacturedVariable cost of goods soldEnding inventory	$Ending inventory	$Ending inventory
Less: Beginning inventoryLess: Ending inventoryLess: Fixed overheadLess: Fixed selling and administrative expensesLess: Goods available for saleLess: SalesLess: Variable cost of goods manufacturedLess: Variable cost of goods soldLess: Variable cost of goods sold	Less: Variable cost of goods sold	Less: Variable cost of goods sold
Cost of goods sold	$fill in the blank 193d5efd9fd605a_29	$fill in the blank 193d5efd9fd605a_30