23 Variable Costing JKL manufacturing produced 2000 baseball

23. Variable Costing JKL manufacturing produced 2000 baseball bats during the period, but only sold 1,600 bats for $10 each. There were no beginning inventories, and nonmanufacturing fixed costs totaled $1,000. Variable manufacturing costs per unit were $2. Variable non- manufacturing costs (sales commissions) were $3 per unit. Fixed manufacturing overhead was $1000. REQUIRED: create a variable costing income statement for JK.L.

Solution

Variable Costing income statement Sales revenue (1600*10) 16000 less variable cost variable cost of goods sold (1600*2) 3200 Variable non mfg cost (1600*3) 4800 8000 Contribution margin 8,000 Fixed expense fixed manufacturing cost 1,000 fixed non manufacturing cost 1,000 2,000 Net income 6,000