On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January: 
a.Prepare an income statement using absorption costing.
b.Prepare an income statement using variable costing.
Definitions:
Research Hypothesis
A specific, testable prediction about the expected outcome in a study, often indicating a predicted relationship between variables.
Nondirect Relationship
A relationship between two variables where changes in one variable do not lead to consistent and predictable changes in another variable directly.
One-tailed
A hypothesis test where the area of interest is only on one side of the sampling distribution, indicating either a greater-than or less-than direction but not both.
Two-tailed
A type of statistical test that considers both directions of a possible effect, looking for deviations from a null hypothesis in two opposite directions.
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