Rey Companys single product sells at a price of $224 per unit. Data for its single product for its first year of operations follow.

Direct materials	$	28	per unit
Direct labor	$	36	per unit
Overhead costs
Variable overhead	$	14	per unit
Fixed overhead per year	$	448,000	per year
Selling and administrative expenses
Variable	$	26	per unit
Fixed	$	216,000	per year
Units produced and sold		28,000	units

1. Prepare an income statement for the year using absorption costing 2. Prepare an income statement for the year using variable costing.

REY COMPANY Absorption Costing Income Statement Sales Less: Variable costs Direct materials Direct labor Variable overhead costs Variable selling and administrative expenses Total variable costs Contribution margin Selling general and administrative expenses Fixed selling and administrative costs Fixed overhead costs Net income (loss)

*Not sure if the entries are correct above ^.

Prepare an income statement for the year using variable costing.

	REY COMPANY Variable Costing Income Statement 0 0 Net income (loss)