Complete Absorption Costing vs. Variable Costing Income statements for Randeris Company, Year 1 & Year 2.

RANDERIS COMPANY - YEAR ONE 30,000 25,000 30 $ $ 10 Number of units produced Number of units sold Unit sales price Variable costs per unit: Direct materials, direct labor variable mfg. overhead Selling & administrative expenses Fixed costs per year: Manufacturing overhead Selling & administrative expenses $ 3 $ 150,000 $100,000 RANDERIS COMPANY - YEAR TWO 20,000 25,000 5,000 30 $ Number of units produced Number of units sold Units in beginning inventory Unit sales price Variable costs per unit: Direct materials, direct labor variable mfg. overhead Selling & administrative expenses Fixed costs per year: Manufacturing overhead Selling & administrative expenses $ 10 $ 3 $ 150,000 $ 100,000 Absorption Costing Variable Costing Direct materials, direct labor, and variable mfg. overhead Fixed mfg. overhead Unit product cost Absorption Costing Sales Less cost of goods sold: Beg. inventory Add COGM Goods available for sale Less ending inventory Gross margin Less selling & admin. exp. Variable Fixed Net operating income Variable Costing Sales Less variable expenses: Beg. inventory Add COGM Goods available for sale Less ending inventory Variable cost of goods sold Variable selling & administrative expenses Contribution margin Less fixed expenses: Manufacturing overhead Selling & administrative expenses Net operating income