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Create a traditional format income statement using Absorption Costing using the information below and from problem #1: Cost information Variable costs per unit: Direct materials

Create a traditional format income statement using Absorption Costing using the information below and from problem #1:

Cost information
Variable costs per unit:
Direct materials$9
Direct labor$10
Variable MOH$5
Variable Selling & Admin.$3
Fixed costs in total:
Fixed MOH$300,000
Fixed Selling & Admin.$400,000

Units produced: 25,000 Units sold: 20,000

Sales Price Per Unit: $70

Cost of Goods Sold calculation:

Beginning inventory$0
+Cost of Goods Manuf.[ Select ] ["720,000", "900,000", "480,000", "600,000"]
=Cost of Goods Avail for Sale[ Select ] ["800,000", "600,000", "720,000", "900,000"]
-Ending inventory (5,000 units*)[ Select ] ["360,000", "180,000", "480,000", "120,000"]
=Cost of Goods Sold[ Select ] ["250,000", "180,000", "900,000", "720,000"]
*25,000 units produced - 20,000 units sold = 5,000 units in ending inventory

Absorption Costing Income Statement:

Sales$ [ Select ] ["600,000", "800,000", "900,000", "1,400,000"]
Less: COGS (see above)[ Select ] ["600,000", "360,000", "720,000", "900,000"]
Gross Margin[ Select ] ["680,000", "540,000", "720,000", "480,000"]
Less: Selling & Admin
Variable Selling & Admin$60,000
Fixed Selling & Admin[ Select ] ["400,000", "300,000", "200,000", "800,000"]
Total Selling & Admin[ Select ] ["340,000", "460,000", "400,000", "600,000"]
Net Operating Income$ [ Select ] ["320,000", "220,000", "280,000", "460,000"]

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