B O E Problem 1 On December 31. The end of the first year of operations, Frankenreiter Inc. manufactured 25,600 units and sold 24,000 units. The following income statement was prepared, based on the variable costing concept: Frankenreiter Inc. Variable Costing Income Statement For the Year Ended December 31, 20Y1 $ $ Sales 9,600,000 Variable Costs of Goods Sold Variable Manufacturing costs 5,376,000 less Ending Inventory 336000 5 Total Variable COGS 5,040,000 $ Manufacturing Margin 4,560,000 7 Less Variable Selling and Administrative Expenses 1,150,000 8 Contribution margin 3.410,000 Less Fixed costs Fixed manufacturing costs 1,664,000 21 Fixed Selling and Administrative expenses 890,000 22 Total Fixed costs 2,554.000 23 Income from Operation 856,000 25 Required: 26 Determine the unit costs of goods manufactured (COGM), based on 27 A. Variable costing concept 28 B. Absorption costing concept 30 Solution: A. Variable COGM per unit = 32 Variable COGM/ # of units produced per unit B. Absorpton costing COGM per unit = 35 Absorption costing COGM/# of units produced per unit 98 40