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Variable Costing Income Statement On November 30, the end of the first month of

ID: 2561360 • Letter: V

Question

Variable Costing Income Statement

On November 30, the end of the first month of operations, Weatherford Company prepared the following income statement, based on the absorption costing concept:

Assume the fixed manufacturing costs were $29,808 and the fixed selling and administrative expenses were $14,200.

Prepare an income statement according to the variable costing concept. Round all final answers to whole dollars.

Weatherford Company
Absorption Costing Income Statement
For the Month Ended November 30
Sales (6,300 units) $163,800 Cost of goods sold: Cost of goods manufactured (7,200 units) $129,600 Inventory, November 30 (1,000 units) 18,000 Total cost of goods sold 111,600 Gross profit $52,200 Selling and administrative expenses 28,990 Income from operations $23,210

Explanation / Answer

Amount in $ Particulars Working Per unit Total Per unit sale price 163800/6300 26          163,800 Cost of goods manufactured          129,600 - Fixed manufactured costs             29,808 Variable cost of goods manufactured             99,792 Variable cost of goods manufactured per unit 99,792/7,200         13.86            87,318 Fixed manufactured cost            29,808 Gross profit            46,674 Selling & Admin exp - fixed            14,200    - variable            14,790 Income from operations            17,684 Closing stock value as per variable costing 1,000*13.86 13860