Problem 2																					Input values
	Solve the given problem based on the following information.
																						Company name				Conglomco
	Scenario Table 1
	Conglomco Income Statement Under Absorption Costing																					Conglomco Income Statement Under Absorption Costing
							2011 ($)			2012 ($)																				2011 ($)		2012 ($)
	Sales ($45 per unit)							900,000			1,800,000											Sales ($45 per unit)								900,000		1,800,000
	Cost of goods sold ($31 per unit)							620,000			1,240,000											Cost of goods sold ($31 per unit)								620,000		1,240,000
	Gross margin							280,000			560,000											Gross margin								280,000		560,000
	Selling and administrative expenses							290,000			340,000											Selling and administrative expenses								290,000		340,000
	Net income/loss							(10,000)			220,000											Net income/loss								(10,000)		220,000
	Scenario Table 2																					Selling price						$45		per unit
	Units Produced and Sold																					COGS						$31		per unit
				2011			2012															Variable selling and administrative cost						$2.50		per unit
	Units produced				30,000			30,000
	Units sold				20,000			40,000
																						Units Produced and Sold
		During 2011 and 2012, the variable cost per unit stayed the same.																							2011	2012
		During 2011 and 2012, the total fixed costs stayed the same.																				Units produced			30,000	30,000		TRUE
																						Units sold			20,000	40,000
	Scenario Table 3
	Per Unit Product Cost
	Direct materials							$5
	Direct labor							$9
	Variable overhead							$7														Fixed overhead						$300,000
	Fixed overhead ($300,000 / 30,000 units)							$10
	Total product cost per unit							$31
																						Per Unit Product Cost
	Scenario Table 4																					Direct materials								$5
	Sales and Administrative Expense																					Direct labor								$9
										2011 ($)			2012 ($)									Variable overhead								$7
	Variable selling and administrative ($2.50 per unit)										50,000			100,000								Fixed overhead ($300,000 / 30,000 units)								$10
	Fixed selling and administrative										240,000			240,000								Total product cost per unit								$31
	Total selling and administrative										290,000			340,000
	Reconcile the variable costing income to the absorption costing income for these two years.
																						Sales and Administrative Expense
																														2011 ($)		2012 ($)
	Reconciliation of Variable Costing Income to Absorption Costing Income																					Variable selling and administrative ($2.50 per unit)								50,000		100,000
										2011 ($)			2012 ($)									Fixed selling and administrative								240,000		240,000
	Variable costing income									?				?								Total selling and administrative								290,000		340,000
	Fixed overhead in ending inventory									?			?
	Fixed overhead in beginning inventory									?			?
	Absorption costing income									?			?