Exercise 6-2 Variable costing income Statement; reconciliation [LO6-2, LO6-3]

1. Prepare the companys income statement in the contribution format using variable costing

2. Reconcile any difference between the net operating income on your variable costing income statement and the net operation income on the absorption costing income statement l.

Exercise 6- 12 Variable Costing Income Statement Reconciliation [LO6-2, LO6-3] Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year appears below Whitman Compan Income Statement Sales (42,000 units x $43.10 per unit) Cost of goods sold (42,000 units $25 per unit) $ 1,810,200 1,050,000 Gross margin Selling and administrative expenses 760,200 441,000 Net operating income $ 319.200 The company's selling and administrative expenses consist of $315 000 per yEar in fixed expenses and $3 per unit sold in variable expenses. The $25 per unit product cost given above is computed as follows s 12 5 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($300 000 - 50 000 units) 6 Absorption costing unit product cost S25 Required 1 Prepare the company's income statement in the contribution format u sing variabl Whitman Company Variable Costing Income Statement Sales