Prepare an income statement for the year ended December 31, through the gross profit for Baxter Company using the following information. Baxter Company sold 8,600 units at $125 per unit. Normal production is 9,000 units.
(Do not round fixed overhead rate calculation when determining fixed factory overhead volume variance.) 
Definitions:
Fixed Costs
Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.
Contribution Margin
The difference between sales revenue and variable costs, representing the amount that contributes towards covering fixed costs and generating profit.
Weighted Average
A calculation that takes into account the varying degrees of importance of the numbers in a data set, used in financial analysis and grading.
Fixed Expenses
Recurring costs that do not fluctuate with the level of production or sales volume, such as lease payments or salaries.
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