Question

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 (220,000 units)			$7,920,000
Variable cost of goods sold:
Variable cost of goods manufactured	$6,360,000
Inventory, October 31 (45,000 units)	(1,080,000)
Total variable cost of goods sold			(5,280,000)
Manufacturing margin			$2,640,000
Variable selling and administrative expenses			(330,000)
Contribution margin			$2,310,000
Fixed costs:
Fixed manufacturing costs	$530,000
Fixed selling and administrative expenses	100,000
Total fixed costs			(630,000)
Operating income			$1,680,000

Prepare an income statement under absorption costing. This is what i have already, I just need remaining numbers

Maryville Equipment Company
Absorption Costing Income Statement
For the Month Ended October 31
Sales		7920000
Cost of goods sold:
Cost of goods manufactured	6890000
Inventory, October 31
Total cost of goods sold
Gross profit
Selling and administrative expenses		430000
Operating income

Answer 1

• No. of units produced = 220000 sold + 45000 ending units = 265,000 units
• Fixed manufacturing overhead per unit = $ 530000 / 265000 = $ 2
• Variable cost of goods manufactured per unit = $ 6360000 / 265000 = $ 24
• Unit product cost = $ 24 + 2 = $ 26
• Inventory, Oct 31 = 45000 units x ($24 + 2) = $ 1,170,000
• Requirement asked

Maryville Equipment Company
Absorption Costing Income Statement
For the Month Ended October 31
Sales		$7,920,000
Cost of goods sold:
Cost of goods manufactured (265000 units x $ 26)	$6,890,000
Inventory, October 31	($1,170,000)
Total cost of goods sold		$5,720,000
Gross profit		$2,200,000
Selling and administrative expenses	[$ 330000 + 100000]	($430,000)
Operating income		$1,770,000