Lawn RX, Inc.: prepare a variable costing income statement for internal management

Lawn RX provides a quarterly lawn care service that is sold for $155. The variable and fixed cost data are as follows:

direct labor $100.00

Overhead Variable cost per unit $7

Fixed cost $100,000

Marketing, general and administrative Variable cost (per service contract completed) $8

Administrative expenses (fixed- per month) $42,000

During 2016, 10,000 service contracts were signed and 9,500 service contracts were completed. Lawn RX had no service contracts at the beginning of the year.