**I have prepared the profit statement for each month and each method (absorption and variable costing)

!!Now i need to reconcile the profit calculated using absorption costing to that using variable costing. How do you do that? Below i attach the results from each method that i got.

Profit statement (absorption Costing)				Profit Statement (Variable Costing)
						February
		February		Sales (11500@22)		253000
Sales (11500 units@22)		253000		Less variable cost of goods sold
Less cost of goods sold				Beginning inventory (0 units)	0
Beginning inventory	0			Add varable COG Manufactured (12500 units)	55300		29000+19000+7300
Add COG manufactured (12500 Units)	83900		29000+19000+7300+28600	Variale COG available fo sales (12500 units)	55300
COG available for sales(12500 units)	83900			Less closing inventory (1000 unitsX4,424)	4424	-50876
Less closing inventory (1000 unitsX6,712	-6712	-77188	(83900/12500)*1000	Variable manufacturing margin		202124
Gross Profit		175812		Less variable selling and administrative expenses		-36225
Less Selling and administration expenses				Contribution Margin		165899
Fixed selling and administration expenses	-8275			Less fixed expenses
Variable selling and administration expenses	-36225	-44500	((57100-44500)/4000*11500	Fixed selling and administration expenses	8275
Net profit for February		131312		Fixed production overheads	28600	-36875
				Net profit  for February		129024

Answer rating: 100% (QA)

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