Absorption and variable costing Bird's Eye View manufactures satellite dishes used in residential and commercial installations for satellite-broadcasted television. For each unit, the following costs apply: $50 for direct material, $100 for direct labor, and $60 for variable overhead. The company's annual fixed overhead cost is $1,050,000; it uses expected capacity of 17,500 units produced as the basis for applying fixed overhead to products. A commission of 10 percent of the selling price is paid on each unit sold. Annual fixed selling and administrative expenses are $252,000. The following additional information is available: Year 1 Year 2 Selling price per unit $500 $500 Number of units sold 14,000 16,800 Number of units produced 17,500 15,400 Beginning inventory (units) 10,500 14,000 Ending inventory (units) 14,000 ? a. Prepare pre-tax income statements under absorption and variable costing for Year 1 and Year 2, with any volume variance being charged to Cost of Goods Sold. Note: Do not use negative signs in your answers. Bird's Eye View Income Statements (Absorption) For the Years Ended December 31, Year 1 and Year 2 Year 1 Year 2 Sales $ CGS 2$ 2$ Underapplied FOH Gross profit 2$ $ S&A: Variable 2$ Fixed Income before taxes $ b. Prepare pre-tax income statements under variable costing for Year 1 and Year 2, with any volume variance being charged to Cost of Goods Sold. Note: Do not use negative signs in your answers. Bird's Eye View Income Statements (Variable) For the Years Ended December 31, Year 1 and Year 2 Year 1 Year 2 Sales $ $ CGS Product CM 2$ 2$ Variable S&A Total CM $ $ Fixed costs: Factory 2$ 2$ S&A Income before taxes $ $ %24