Absorption Costing Income Statement On March 31, the end of the first month of o

Question

Absorption Costing Income Statement

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

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

Sullivan Equipment Company
Variable Costing Income Statement
For the Month Ended March 31 Sales (9,900 units) $574,200 Variable cost of goods sold: Variable cost of goods manufactured $280,600 Inventory, March 31 (2,300 units) (52,900) Total variable cost of goods sold 227,700 Manufacturing margin $346,500 Variable selling and administrative expenses 148,500 Contribution margin $198,000 Fixed costs: Fixed manufacturing costs $61,000 Fixed selling and administrative expenses 39,600 Total fixed costs 100,600 Income from operations $97,400

Explanation / Answer

Absorption costing income statement :

Sales 574200 Cost of goods sold Cost of goods manufactured 341600 Less: Ending inventory -64400 Cost of goods sold -277200 Gross profit 297000 Less:Selling and administrative expense -188100 Net operating income 108900

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