Exercise 19-7 Income reporting under absorption costing and variable costing LO P2

[The following information applies to the questions displayed below.] Oak Mart, a producer of solid oak tables, reports the following data from its second year of business.

Sales price per unit	$	310	per unit
Units produced this year		115,000	units
Units sold this year		118,500	units
Units in beginning-year inventory		3,500	units
Beginning inventory costs
Variable (3,500 units $140)	$	490,000
Fixed (3,500 units $80)		280,000
Total	$	770,000
Manufacturing costs this year
Direct materials	$	44	per unit
Direct labor	$	66	per unit
Overhead costs this year
Variable overhead	$	3,400,000
Fixed overhead	$	7,400,000
Selling and administrative costs this year
Variable	$	1,450,000
Fixed		4,400,000

Exercise 19-7 Part 1

1. Prepare the current-year income statement for the company using variable costing.

OAK MART COMPANY
Variable Costing Income Statement
Beginning inventory:
Manufacturing costs this year
	0
		0
Net income (loss)