On June 30, 2014, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on the variable costing concept:

a. Prepare an absorption costing income statement.
b. Reconcile the variable costing income from operations of $ 1,255,000 with the absorption costing income from operations determined in(a).

Transcribed Image Text:

7.450,000 Variable cost of goods sold: Variable cost of goods manufactured (500,000 units x $14 per unit) Less ending inventory (80,000 units×$14 per unit) $7,000,000 1,120,000 5,880,000 $1,570,000 80,000 $1,490,000 Variable selling and administrative expenses...... Contribution margin.... Fixed costs: Fixed selling and administrative expenses........ 75,000 235,000 $1.255,000