Absorption and Variable Costing Income Statements

During the first month of operations ended July 31, YoSan Inc. manufactured 9,400 flat panel televisions, of which 8,800 were sold. Operating data for the month are summarized as follows:

Sales		$1,144,000
Manufacturing costs:
Direct materials	$573,400
Direct labor	169,200
Variable manufacturing cost	150,400
Fixed manufacturing cost	75,200	968,200
Selling and administrative expenses:
Variable	$88,000
Fixed	40,500	128,500

1. Prepare an income statement based on the variable costing concept.

YoSan Inc.
Variable Costing Income Statement
For the Month Ended July 31
Sales		$
Variable cost of goods sold:
Variable cost of goods manufactured	$
Inventory, July 31
Total variable cost of goods sold
Manufacturing margin		$
Variable selling and administrative expenses
Contribution margin		$
Fixed costs:
Fixed manufacturing costs	$
Fixed selling and administrative expenses
Total fixed costs
Operating income		$