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Read the requirements.

Requirement $1.$ Prepare an income statement for the upcoming year using variable costing.

Amber Manufacturing

Contribution Margin Income Statement $($Variable Costing$)$

For the Year Ended December $31$

Sales revenue

Less: Variable expenses

Variable cost of goods sold

Variable operating expenses

Contribution margin

Less: Fixed expenses

Fixed manufacturing overhead

Fixed operating expenses

Operating income

Requirements

Prepare an income statement for the upcoming year using variable costing.

Prepare an income statement for the upcoming year using absorption

costing.

What causes the difference in income between the two methods?

More info

Sales price per unit $$43$

Variable manufacturing costs per unit manufactured $($DM$,$ DL and

variable MOH $)$ $$23$

Variable operating expenses per unit sold $$1$

Fixed manufacturing overhead $(MOH)$ in total for the year $$133,000$

Fixed operating expenses in total for the year $$45,000$

Units manufactured during the year $19,000$ units

Units sold during the year $13,000$ units