O\'Sullivan\'s Products manufactures a single product. Cost, sales, and producti

Question

O'Sullivan's Products manufactures a single product. Cost, sales, and production information for the company and its single product is as follows (Click the icon to view the data.) Read the requirements Requirement 1. Prepare an income statement for the upcoming year using variable costing. O'Sullivan's Products Contribution Margin Income Statement (Variable Costing) For the Year Ended December 31 Sales revenue $ 693,000 LessVariable expenses Variable operating expenses Variable cost of goods sold 33,000 385,000 275,000 Contribution margin Less: Fixed expenses Fixed manufacturing overhead Fixed operating expenses 143,000 88,000 44,000 Operating income Requirement 2. Prepare an income statement for the upcoming year using absorption costing O'Sullivan's Products Income Statement (Absorption Costing) For the Year Ended December 31 Less: Less:

Explanation / Answer

Income Statement (Absorption Costing) Sales 693,000 less:Cost of goods sold       (385000+143,000) 528000 Gross profit 165,000 less:Operating expense      (33,000+88,000) 121000 Operating income 44,000

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