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Income Statement Variable Costing

- The document contains income statements using variable and absorption costing methods for a company that had $10.3 million in revenues, $433,000 in sales, and beginning and ending inventory of $90,000 and $34,000 respectively. - Under variable costing, the company's contribution margin was $7.5 million and operating income was $4.6 million. - Under absorption costing, cost of goods sold was $4.5 million, gross margin was $5.9 million, and operating income was $4.3 million.

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Achmad Rizal
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70 views2 pages

Income Statement Variable Costing

- The document contains income statements using variable and absorption costing methods for a company that had $10.3 million in revenues, $433,000 in sales, and beginning and ending inventory of $90,000 and $34,000 respectively. - Under variable costing, the company's contribution margin was $7.5 million and operating income was $4.6 million. - Under absorption costing, cost of goods sold was $4.5 million, gross margin was $5.9 million, and operating income was $4.3 million.

Uploaded by

Achmad Rizal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Sales 433,000

Ending Inventory 34,000


Beginning Inventory (90,000)
Production 377,000

Selling Price 24
Variable Manufacturing Cost per Unit 5.4
Variable Operating cost per unit 1.2

Income Statement Variable Costing


Revenues 10,392,000
Variable costs
  Beginning inventory 486,000
  Variable manufacturing costs 2,035,800
  Cost of goods available for sale 2,521,800
  Deduct ending inventory 183,600
  Variable cost of goods sold 2,338,200
  Variable operating costs 519,600
  Adjustment for variances -
      Total variable costs 2,857,800
Contribution margin 7,534,200
Fixed costs
  Fixed manufacturing overhead costs 1,852,200
  Fixed operating costs 1,130,000
      Total fixed costs 2,982,200
Operating income 4,552,000

Fixed Manufacturing Overhead 1,852,000


Denominator Level machine hours 6,300
Fixed Manufacturing Overhead allocation rate 294
Standart production rate 60
Fixed Manufacturing Overhead allocation rate per unit 5

Income Statement Absorbtion Costing


Revenues 10,392,000
COGS
  Beginning inventory 926,952
  Variable manufacturing costs 2,035,800
  Allocated Fixed Manufacturing cost 1,847,101
  Cost of goods available for sale 4,809,853
  Deduct ending inventory (350,182)
  Adjustment for variances 4,899 U
COGS 4,464,570
Gross Margin 5,927,430
Operating Cost
Variable operating costs 519,600
  Fixed operating costs 1,130,000
      Total fixed costs 1,649,600
Operating income 4,277,830

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