Problem:
On June 30, 2008, the end of the first month of operations, Kristen Candle Co. prepared the following income statement, based on the variable costing concept:
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Sales (20,000 units)
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$240,000
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Variable cost of goods sold:
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Variable cost of goods manufactured (22,000 units _
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|
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$8 per unit)
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$176,000
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Less ending inventory (2,000 units _ $8 per unit)
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16,000
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Variable cost of goods sold
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160,000
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Manufacturing margin
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$ 80,000
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Variable selling and administrative expenses
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14,200
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Contribution margin
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$ 65,800
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Fixed costs:
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|
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Fixed manufacturing costs
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$29,700
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Fixed selling and administrative expenses
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23,400
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53,100
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Income from operations
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$ 12,700
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Prepare an absorption costing income statement.