Variable Costing Income Statement

The following data were adapted from a recent income statement of Procter & Gamble Company:

	(in millions)
Sales	$83,062
Operating costs:
Cost of products sold	$42,460
Marketing, administrative, and other expenses	25,314
Total operating costs	$67,774
Income from operations	$15,288

Assume that the variable amount of each category of operating costs is as follows:

			(in millions)
Cost of products sold			$23,778
Marketing, administrative, and other expenses			10,125

a. Based on the data given, prepare a variable costing income statement for Procter & Gamble Company, assuming that the company maintained constant inventory levels during the period.

Procter and Gamble Company
Variable Costing Income Statement (assumed)
(in millions)
Sales		$
Variable cost of products sold
Manufacturing margin		$
Variable marketing, administrative, and other expenses
Contribution margin		$
Fixed costs:
Fixed manufacturing costs	$
Fixed marketing, administrative, and other expenses
Total fixed costs
Income from operations		$