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\fBeginning inventory (units) Actual units produced Budgeted units to be produced Units sold Manufacturing costs per unit produced Marketing costs per unit sold Fixed manufacturing costs Fixed marketing costs Selling price per unit Q1 0 2,900 3,000 2,800 $100 $20 $600,000 $200,000 $400 Q2 100 3,200 3,000 3,100 $100 $20 $600,000 $200,000 $400 Q3 200 3,100 3,000 3,200 $100 $20 $600,000 $200,000 $400 Q1 0 2,900 3,000 2,800 $100 $20 $600,000 $200,000 $400 Q2 100 3,200 3,000 3,100 $100 $20 $600,000 $200,000 $400 Q3 200 3,100 3,000 3,200 $100 $20 $600,000 $200,000 $400 Q1 $1,120,000 $860,000 $260,000 $56,000 $200,000 $4,000 Q2 $1,240,000 $890,000 $350,000 $62,000 $200,000 $88,000 Q3 $1,280,000 $940,000 $340,000 $64,000 $200,000 $76,000 Beginning inventory Variable manufacturing costs incurred for all goods produced Allocated fixed manufacturing costs Cost of goods available for sale Ending inventory Initial COGS Adjustment for PVV Final COGS $0 $290,000 $580,000 $870,000 $30,000 $840,000 $20,000 $860,000 $30,000 $320,000 $640,000 $990,000 $60,000 $930,000 -$40,000 $890,000 $60,000 $310,000 $620,000 $990,000 $30,000 $960,000 -$20,000 $940,000 Allocated fixed manufacturing costs PVV $580,000 $20,000 $640,000 ($40,000) $620,000 ($20,000) $1,120,000 $280,000 $56,000 $784,000 $600,000 $200,000 ($16,000) $1,240,000 $310,000 $62,000 $868,000 $600,000 $200,000 $68,000 $1,280,000 $320,000 $64,000 $896,000 $600,000 $200,000 $96,000 $0 $290,000 $290,000 $10,000 $280,000 $10,000 $320,000 $330,000 $20,000 $310,000 $20,000 $310,000 $330,000 $10,000 $320,000 Absorption operating income Variable operating income Difference Q1 $4,000 ($16,000) $20,000 Q2 $88,000 $68,000 $20,000 Q3 $76,000 $96,000 ($20,000) Fixed manufacturing in EI Fixed manufacturing in BI Difference $20,000 $0 $20,000 $40,000 $20,000 $20,000 $20,000 $40,000 ($20,000) 100 0 100 200 100 100 100 200 (100) Beginning inventory (units) Actual units produced Budgeted units to be produced Units sold Manufacturing costs per unit produced Marketing costs per unit sold Fixed manufacturing costs Fixed marketing costs Selling price per unit Absorption costing Revenue Cost of goods sold Gross margin Variable marketing costs Fixed marketing costs Operating Income Variable costing Revenue Variable cost of goods sold Variable marketing costs Contribution margin Fixed manufacturing costs Fixed marketing costs Operating Income Beginning inventory Variable manufacturing costs incurred for all goods produced Cost of goods available for sale Ending inventory Variable cost of goods sold SUMMARY Units in ending inventory Units in beginning inventory Change in units