Whitney Company has just completed its first year of operations. The company's accountant has prepared an absorption costing income statement for the year as seen below:

Sales (35,000 units at $25 ) $875,000
Beginning Inventory 0
Cost of Goods Manufactured (35,000 × $12 ) + $160,000 = 580,000
Cost of Goods Available 580,000
Ending Inventory 0
Cost of Goods Sold 580,000
Gross Margin 295,000
Selling and Administrative Expenses 280,000
Net Income $15,000

The variable production costs per unit are determined as follows:
Direct materials $5
Direct labor 6
Variable production 1
Total variable production costs $12

The company's fixed production costs are $160,000 per year. The company's selling and administrative expenses consist of $210,000 per year in fixed expenses and $2 per unit in variable expenses.

Required:
Prepare the company's income statement in the contribution format.

Sales $875,000
Variable Expenses:
Production Costs(35,000 × $12 ) $420,000
Selling and Administrative(35,000 × $2 ) 70,000
Total Variable Expenses 490,000
Contribution Margin 385,000
Fixed Expenses:
Production Costs 160,000
Selling and Administrative 210,000
Total Fixed Expenses 370,000
Net Income $15,000