Question

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 (5,800 units)			$208,800
Cost of goods sold:
Cost of goods manufactured (6,800 units)	$176,800
Inventory, November 30 (1,000 units)	(26,000)
Total cost of goods sold			150,800
Gross profit			$58,000
Selling and administrative expenses			34,520
Income from operations			$23,480

Assume the fixed manufacturing costs were $40,664 and the fixed selling and administrative expenses were $16,910.

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
		$
Variable cost of goods sold:
	$
		$
		$
Fixed costs:
	$
		$

Check My Work

Answer 1

Sales		208800
Variable cost of goods sold:
Variable cost of goods manufactured (176800-40664)	136136
Less: Ending inventory value	-20020
Variable cost of goods sold		116116
Manufacturing margin		92684
Variable selling and administrative expense (34520-16910)		-17610
Contribution margin		75074
Less: Fixed cost
Fixed manufacturing cost	40664
Fixed selling and administrative expense	16910
Total Selling and administrative expense		57574
Net operating income		17500