Kau Corp. reported the following information for the most recent years ended: Year 1 Year 2 Production units 150,000 125,000 Sales price per unit $ 55.00 $ 55.00 Units sold 125,000 130,000 Direct Materials per unit $ 25.00 $ 25.00 Direct Labor per unit $ 12.00 $ 12.00 Variable Manufacturing OH per unit $ 5.00 $ 5.00 Fixed Manufacturing OH costs $450,000 $450,000 Variable selling costs per unit $ 4.00 $ 4.00 Fixed selling costs $ 50,000 $ 50,000 There was no beginning inventory in Year 1. a. Prepare Income Statements for each year (Year 1 and Year 2) based on Full Costing.

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