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"]