Question

Absorption Costing Income Statement

On October 31, the end of the first month of operations, Maryville Equipment Company prepared the following income statement, based on the variable costing concept:

Maryville Equipment Company Variable Costing Income Statement For the Month Ended October 31
Sales (8,600 units)			$361,200
Variable cost of goods sold:
Variable cost of goods manufactured	$175,100
Inventory, October 31 (1,700 units)	(28,900)
Total variable cost of goods sold			(146,200)
Manufacturing margin			$215,000
Variable selling and administrative expenses			(94,600)
Contribution margin			$120,400
Fixed costs:
Fixed manufacturing costs	$30,900
Fixed selling and administrative expenses	25,800
Total fixed costs			(56,700)
Operating income			$63,700

Prepare an income statement under absorption costing. Round all final answers to whole dollars.

Maryville Equipment Company
Absorption Costing Income Statement
For the Month Ended October 31
Sales		$fill in the blank 2
Cost of goods sold:
Cost of goods manufactured	$fill in the blank 4
Inventory, October 31	fill in the blank 6
Total cost of goods sold		fill in the blank 8
Gross profit		$fill in the blank 10
Selling and administrative expenses		fill in the blank 12
Operating income		$fill in the blank 14

Answer 1

Maryville Equipment Company
Absorption Costing Income Statement
For the Month Ended October 31
Sales		$ 361,200
Cost of goods sold:
Cost of goods manufactured ($175,100+30,900)	$ 206,000
Inventory, October 31 (206,000/(8,600+1,700)*1,700)	$ (34,000)
Total cost of goods sold		$ (172,000)
Gross profit		$ 189,200
Selling and administrative expenses ($94,600+25,800)		$ (120,400)
Operating income		$    68,800

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