Topple Company produces a single product. Operating data for the company and its absorption costing income statement for the last year is presented below:
- Units in beginning inventory 0
- Units produced 9,000
- Units sold 7,000
- Sales $100,000
- Less cost of goods sold:
- Beginning inventory 0
- Add cost of goods manufactured 54,000
- Goods available for sale 54,000
- Less ending inventory 12,000
- Cost of goods sold 42,000
- Gross margin 58,000
- Less selling and admin. expenses 28,000
- Net operating income $30,000
Variable manufacturing costs are $4 per unit. Fixed factory overhead totals $18,000 for the year. This overhead was applied at a rate of $2 per unit. Variable selling and administrative expenses were $1 per unit sold.
Required: Prepare a new income statement for the year using variable costing.