Variable Costing Income Statement On November 30, the end of the first month of
ID: 2400703 • Letter: V
Question
Variable Costing Income Statement
On November 30, the end of the first month of operations, Weatherford Company prepared the following income statement, based on the absorption costing concept:
Assume the fixed manufacturing costs were $37,050 and the fixed selling and administrative expenses were $14,750.
Prepare an income statement according to the variable costing concept. Round all final answers to whole dollars.
Weatherford CompanyAbsorption Costing Income Statement
For the Month Ended November 30 Sales (4,900 units) $171,500 Cost of goods sold: Cost of goods manufactured (5,700 units) $142,500 Inventory, November 30 (800 units) (20,000) Total cost of goods sold 122,500 Gross profit $49,000 Selling and administrative expenses 30,110 Income from operations $18,890
Explanation / Answer
Construct The Variable Costing Income Statement Aug Sales 171,500 Less: Variable cost varable cost of goods manufactured 105450 Less: Inventory Nov 30(800*18.50) 14,800 90,650 variable Selling and admin (30110-14750) 15,360 Contribution margin 65,490 Fixed expense: Fixed Manufacturing overheads 37,050 Fixed selling expense 14,750 Net operating Income 13,690 Note: Variable cost of Goods manufactured pr unit: Total cost of goods manufactured 142500 less: Fixed manufacturing expense 37050 variable cost of Goods manufactured 105450 Divide: Number of units produced 5700 Cost per unit manufactured 18.5
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