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:

Weatherford Company Absorption Costing Income Statement For the Month Ended November 30
Sales (2,900 units)			$81,200
Cost of goods sold:
Cost of goods manufactured (3,400 units)	$68,000
Inventory, November 30 (500 units)	(10,000)
Total cost of goods sold			58,000
Gross profit			$23,200
Selling and administrative expenses			13,820
Income from operations			$9,380

Assume the fixed manufacturing costs were $16,320 and the fixed selling and administrative expenses were $6,770.

Prepare an income statement according to the variable costing concept. Round all final answers to whole dollars.

Weatherford Company
Variable Costing Income Statement
For the Month Ended November 30
Sales		$
Variable cost of goods sold:
Variable cost of goods manufactured	$
Inventory, November 30
Total variable cost of goods sold
Manufacturing margin		$
Variable selling and administrative expenses
Contribution margin		$
Fixed costs:
Fixed manufacturing costs	$
Fixed selling and administrative expenses
Total fixed costs
Income from operations		$

Answer 1

variable costing income statement :

Sales		81200
Variable cost of goods sold:
Variable cost of goods manufactured (68000-16320)	51680
Inventory, November 30 (51680*500/3400)	7600
Total variable cost of goods sold		44080
Manufacturing margin		37120
Variable selling and administrative expenses		7050
Contribution margin		30070
Fixed costs
Fixed manufacturing costs	16320
Fixed selling and administrative expenses	6770
Total fixed cost		23090
Income from operations		6980