Variable and Absorption Costing The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: (in millions) Sales $38,537 Cost of goods sold $(28,309) Selling, administrative, and other expenses (9,730) Total expenses $(38,039) Operating income $498 Assume that $8,500 million of cost of goods sold and $4,000 million of selling, administrative, and other expenses were fixed costs. Inventor were as follows: Beginning inventory $9,700 Ending inventory 8,614 Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. Caterpillar Inc. Variable Costing Income Statement (assumed) For the Year Ended December 31 Sales 38,537 Variable cost of goods sold: Beginning inventory Variable cost of goods manufactured I LLIUy to the variable costing concept for Caterpillar Inc. Round numbers to nearest million Caterpillar Inc. Variable Costing Income Statement (assumed) For the Year Ended December 31 Sales 38,537 Variable cost of goods sold: Beginning inventory Variable cost of goods manufactured Ending inventory Total variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing costs Fixed selling and administrative expenses Total fixed costs Operating income Feedback MW