Company prepared the following absorption-costing income statement for the first year of operations. The income statement is for the fiscal year ended May 31, 2015:
Sales (16,000 units) $320,000
Cost of Goods Sold 216,000
Gross Margin 104,000
Selling and administrative expenses 46,000
Operating income $58,000
Additional data follow:
Variable selling and administrative expenses $1.50 per unit
Variable manufacturing costs $11.00 per unit
Direct materials inventory, May 31, 2015 0
Work-i n-process inventory, May 31, 2015 0
Units produced 17,500 units
Units expected to be produced 17,500 units
Required:
Assume actual fixed costs were equal to budgeted fixed costs. Prepare a variable-costing income statement for the year ended May 31, 2015.