Oklahoma State Company Produced 125,000 Units and Sold 112,500 Units

Oklahoma State Company produced 125,000 units and sold 112,500 units during its first year of operations. Actual fixed costs came in right on budget, and variable selling costs were $1.50 per unit sold. Additional data follow: $\begin{array}{l}\text { Sales }&\$2,868,750\\\text { manuf acturing costs: }\\\text { Material and lab or } & \$ 1,125,000 \\\text { Variable overhead } & \$ 431,250 \\\text { Fixed overhead } & \$ 656,250\\\text { Selling expenses: Variable }&\$337,500\\\text { Fixed }&\$131,250\end{array}$ Required:
a. Prepare an income statement for the year assuming variable costing.
b. Prepare an income statement for the year assuming absorption costing.
c.