The following data were adapted from a recent income statement of Procter & Gamb

Question

The following data were adapted from a recent income statement of Procter & Gamble Company:

1 (in millions)

2 Sales $85,952.00

3 Operating costs:

4 Cost of products sold $43,093.00

5 Marketing, administrative, and other expenses 30,428.00

6 Total operating costs $73,521.00

7 Income from operations $12,431.00

Assume that the variable amount of each category of operating costs is as follows:

1 (in millions)

2 Cost of products sold $23,790.00

3 Marketing, administrative, and other expenses 12,130.00 Required:

A. Based on the data given, prepare a variable costing income statement for Procter & Gamble Company, assuming that the company maintained constant inventory levels during the period. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries.A colon (:) will automatically appear if it is required. If a net loss is incurred, enter that amount as a negative number using a minus sign.

Explanation / Answer

Prepare variable costing income statement :

Sales 85952 Less: Variable cost of product sold (23790) Gross contribution margin 62162 Less: Variable Marketing, administrative, and other expenses (12130) Net contribution margin 50032 Less: Fixed cost Fixed cost of product sold (19303) Marketing, administrative, and other expenses (18298) (37601) Income from operation 12431

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