The information below represents the beginning and ending inventory amounts along with the production and sales for the month in umbrella units

Beginning Inventory: 0 Umbrellas

Production: 80,000 Umbrellas

Sales: 60,000 Umbrellas

Ending Inventory: 20,000 Umbrellas

The Hampshire Company manufactures umbrellas that sell for $12.50 each. In 2014, the company made and sold 60,000 umbrellas. The company had fixed manufacturing costs of $216,000. It also had fixed costs for administration of $79,525. The per-unit costs of each umbrella are as follows:

Using the information

Prepare a variable costing income statement.

Prepare an absorption costing income statement.

Direct Materials: $3.00

Direct Labor: $1.50

Variable Manufacturing Overhead: $0.40

Variable Selling Expenses: $1.10

Requirement 1
Hampshire Company
Variable Costing Income Statement
	Units	$
Sales	X	$		$
Variable Cost of Goods Sold:
Beginning Inventory			$
Direct Materials	X	$	$
Direct Labor	X	$	$
Manufacturing Overhead	X	$	$
Total Variable Costs			$
Cost of Good Available for Sale			$
Deduct Ending Inventory	X	$	$
Variable Costs of Goods Sold				$
Variable Selling Costs	X	$	$	$
Contribution Margin				$
Fixed Costs:
Fixed Manufacturing Costs				$
Fixed Administrative Costs				$
Operating Income				$
Requirement 2
Hampshire Company
Absorption Costing Income Statement
	Units	$
Sales	X	$		$
Variable Cost of Goods Sold:
Beginning Inventory			$
Direct Materials	X	$	$
Direct Labor	X	$	$
Manufacturing Overhead	X	$	$
Total Variable Costs			$
Allocated Fixed Manufacturing Costs	X	$	$
Cost of Good Available for Sale			$
Deduct Ending Inventory	X	$	$
Costs of Goods Sold				$
Gross Margin				$
Fixed Costs:
Variable Selling Costs	X	$		$
Fixed Administrative Costs				$
Operating Income				$