absorption Statement Saxon, Inc. Absorption Costing Income Statement For the Year Ended December 31 $1,125,000.00 1 Sales 2 Cost of goods sold: Beginning inventory Cost of goods manufactured $0.00 840,000.00 (210,000.00) Ending inventory Total cost of goods sold Gross profit 630,000.00 $495,000.00 275,000.00 $220,000.00 Selling and administrative expenses Income from operations My Work All work saved. Email in riable Statement Saxon, Inc. Variable Costing Income Statement For the Year Ended December 31 $1,125,000.00 Sales 2 Variable cost of goods sold: Beginning inventory $0.00 600,000.00 Variable cost of goods manufactured Ending inventory Total variable cost of goods sold (150,000.00) 450,000.00 Manufacturing margin $675,000.00 3 Variable selling and administrative expenses 210,000.00 9 Contribution margin $465,000.00 10 Fixed costs: 11 Fixed manufacturing costs $240.000.00 65.000.00 11 Fixed selling and administrative expenses Total fixed costs 1 14. Income from operations 305,000.00 $160,000.00 anufacturing Decisions more useful Il costs are controllable in the long run by someone within a business. For a given level of management, costs may be controllable costs The production manager for Saxon, Inc. is worried because the company is not showing a high enough profit. Looking at the income state "ariable Statement panel, he notices that the income from operations is higher on the absorption cost income statement. He is considerin company's capacity for manufacturing, in the coming year. He reasons that this will boost income from operations and satisfy the compan profitable. Although the total units manufactured changes, assume that total fixed costs, unit variable costs, unit sales price, and the sales that follow. If the answer is zero, enter "O". 1. Use the income statements on the Absorption Statement and Variable Statement panels to complete the following table for the original statements at a production level 10,000 units higher and add that information to the table. Assume that total fixed costs, unit variable costs same at both production levels. Original Original Production Level-Absorption $220,000 Income From Operations Additional Production 10,000 Level-Variable Units-Absorption $160,000 Additional 10,000 Units-Variable Check My Work