M08 worksheet 2 Price and costs Variable Cost per unit Absorption Cost per unit Type of account Selling Price $1,000/unit Manufacturing costs Direct materials $100/unit Direct labor $10/unit Variable Overhead $50/unit Fixed Overhead $900,000/year Selling and Adminstrative Expenses Variable $1/unit Fixed Year $300,000/year Units Produced Units sold Units in Ending Inventory Smartphones 30,000 33,000 7,000 Smartphones Variable Costing Smartphones Convert Income Statement to Absorbtion Sales Variable Costing Net Income Direct Materials Add Fixed OH in ending Inventory Direct Labor Less Fixed OH in beginning Inventory Variable OH Variable S&A Total Variable Costs Contribution Margin Fixed OH Fixed S&A Net Income Balance Sheet Ending Inventory Absorption Net Income Smartphones Absorption Costing Income Statement Sales Direct Materials Direct Labor Variable QH Fixed OH COGS Gross Margin S&A Variable S&A Fixed Net Income Balance Sheet Ending Inventory