V$.$ Prepare a CONTRIBUTION MARGIN $($also known as variable costing$)$

income statement given a traditional $($also known as absorption costing$)$

income statement

Bruno Industries manufactures and sells a single product. The controller has

prepared the following income statement for the most recent year:

The company produced $8,000$ units and sold $7,000$ units during the year ending

December $31.$ Fixed manufacturing overhead $(MOH)$ for the year was $$152,000,$

while fixed operating expenses were $$62,000.$ The company had no beginning

inventory.

Requirements

Will the company's operating income under variable costing be higher,

lower, or the same as its operating income under absorption costing? Why?

Prepare a variable costing income statement for the year.