e en operations, an Equlpment Company prepared the TolloMng Income statemeht, ba

Question

e en operations, an Equlpment Company prepared the TolloMng Income statemeht, based on the vanable Costing concep Sullivan Equipment Company Variable Costing Income Statement For the Month Ended March 31 Sales (264,000 units) $66,000,000 Variable cost of goods sold Variable cost of goods manufactured $45,000,000 (5,400,000) Inventory, March 31 (36,000 units) Total variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: 39, 600,000 $26,400,000 2,400,000 $24,000,000 Fixed manufacturing costs Fixed selling and administrative expenses Total fixed costs 7,500,000 375,000 7,875,000 Income from operations $16,125,000 Prepare an income statement under absorption costing Sullivan Equipment Company Absorption Costing Income Statement For the Month Ended March 31 Sales 66,000,000 Cost of goods sold: Cost of goods manufactured 45.000.000 | Inventory, March 31 39,600,000 X Total cost of goods sold Gross profit Selling and administrative expenses Income from operations 46,200,000 19,800,000 2.775.000 17,025,000

Explanation / Answer

Q1) Absorption costing income statement :

Q2) Variable costing income statement :

Sales 66000000 Cost of goods sold Cost of goods manufactured 52500000 Inventory, March 31 (6300000) Total cost of goods sold 46200000 Gross margin 19800000 Selling and administrative expense 2775000 Income from operation 17025000

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