Cost of goods sold cost of goods sold Gross margin 52eeee So

Cost of goods sold cost of goods sold Gross margin 52e,eee

Solution

Income statement under Variable costing

Particulars

Amount

Explanation :

(i) Incom as per absorbed costing = 10,90,000 $

(ii) Under absorbed fixed

Manufacturing over heads = 1,60,000 $

( 1,00,000*8 - 80,000 * 8 )

  

(iii) Income as per variable costing ( i - ii ) = 9,30,000 $

Note : variable cost per unit as per Variable costing

Direct material + Direct labour + variable manufacturing overhead = 4$+4$+4$ = 12$

Particulars	Amount	Amount
Sales ( 80,000 units * $ 40 per unit )		32,00,000
Less : Variable cost of goods sold
Opening inventory	0
Add : Variable cost of goods mfg	12,00,000
( 1,00,000 units * 12 per unit (wn:1))
Variable cost of goods avialable for sale	12,00,000
Less : closing inventory. ( 20,000 units *12 $ per unit )	(2,40,000)	(9,60,000)
Gross contrubution Margin		22,40,000
Less : Variable selling exp		(1,60,000)
( 80,000 units * $ 2 per unit )
Contribution Margin		20,80,000
Less : Period expenses
Fixed manufacturing overhead exp	8,00,000
Fixed selling & Admin Exp	3,50,000	11,50,000
Net income		9,30,000