6 Data Section 7 8 Actual production in units 100000 9 Sales

6	Data Section:
7
8	Actual production in units	100,000
9	Sales in units	80,000
10	Sales price per unit	$30
11	Variable manufacturing costs per unit	$14
12	Variable selling costs per unit	$2
13	Fixed manufacturing costs	$630,000
14	Fixed selling expenses	$100,000
61
15	-	-	-
16	Answer Section:

17	Income statement: Absorption costing
18
19	Sales	FORMULA1
20	Cost of goods sold:
21	Variable manufacturing costs	FORMULA2
22	Fixed manufacturing costs	FORMULA3
23		----------
24	Total goods available for sale	$0
25	Less ending inventory	FORMULA4
26		----------
27	Cost of goods sold	$0
28		----------
29	Gross profit	$0
30	Fixed selling expenses	FORMULA5
31	Variable selling expenses	FORMULA6
32		----------
33	Operating income	$0
34		==========
	_	_	_

35	Income statement: Variable costing
36
37	Sales	$0
38	Cost of goods sold:
39	Variable manufacturing costs	FORMULA7
40	Less ending inventory	FORMULA8
41		----------
42	Variable cost of goods sold	$0
43		----------
44	Manufacturing margin	$0
45	Variable selling expenses	FORMULA9
46		----------
47	Contribution margin	$0
48	Fixed manufacturing costs	FORMULA10
49	Fixed selling expenses	0
50		----------
51	Operating income	$0
52		==========

6	Data Section:
7
8	Actual production in units	100,000
9	Sales in units	80,000
10	Sales price per unit	$30
11	Variable manufacturing costs per unit	$14
12	Variable selling costs per unit	$2
13	Fixed manufacturing costs	$630,000
14	Fixed selling expenses	$100,000
61
15	-	-	-
16	Answer Section:

17	Income statement: Absorption costing
18
19	Sales	FORMULA1
20	Cost of goods sold:
21	Variable manufacturing costs	FORMULA2
22	Fixed manufacturing costs	FORMULA3
23		----------
24	Total goods available for sale	$0
25	Less ending inventory	FORMULA4
26		----------
27	Cost of goods sold	$0
28		----------
29	Gross profit	$0
30	Fixed selling expenses	FORMULA5
31	Variable selling expenses	FORMULA6
32		----------
33	Operating income	$0
34		==========
	_	_	_

35	Income statement: Variable costing
36
37	Sales	$0
38	Cost of goods sold:
39	Variable manufacturing costs	FORMULA7
40	Less ending inventory	FORMULA8
41		----------
42	Variable cost of goods sold	$0
43		----------
44	Manufacturing margin	$0
45	Variable selling expenses	FORMULA9
46		----------
47	Contribution margin	$0
48	Fixed manufacturing costs	FORMULA10
49	Fixed selling expenses	0
50		----------
51	Operating income	$0
52		==========

19. sales ==> 80000*30 = $ 2400000

21. Variable manufacturing costs ==> actual units manufactured * Variable manufacturing costs per unit

= 100000*14 =$ 1400000

22 Fixed manufacturing costs ==> actual units manufactured * Fixed manufacturing costs per unit

= $630,000

25 Less ending inventory ==> 20000 units left to sell

30 Fixed selling expenses ==> $ 100000

31 Variable selling expenses ==> Variable selling costs per unit * total units sold

= 2 * 80000 = $ 160000

39 Variable manufacturing costs ==> actual units manufactured * Variable manufacturing costs per unit

= 100000*14 =$ 1400000

40 Less ending inventory ==> 20000 units left to sell

80000 units sold

45 Variable selling expenses ==> Variable selling costs per unit * total units sold

= 2 * 80000 = $ 160000

48 Fixed manufacturing costs ==> actual units manufactured * Fixed manufacturing costs per unit

= $630,000