Income Statement Under Absorption Costing Year 1 Year 2 Sales Value 960 000 1 560 00 2625673

Income Statement under absorption Costing Year 1 Year 2 Sales Value 960,000 1,560,000 Cost of Goods Sold512,000 832,000 Gross Profit 448,000 728,000 Less: Variable SG&A 48,000 78,000 Less: Fixed SG&A 245,000 245,000 Profit/(Loss) 155,000 405,000 Note: Selling & Admin Exp. $3 Variable & $245,000 fixed each year Year 1 2 Beg. Inventory 5,000 Unit Produced 21,000 21,000 Unit Sold 16,000 26,000 Closing Inventory 5,000 – Direct material 6 Direct Labor 10 Variable Mfg Ohs 4 Variable SG&A 3 Total Variable cost 23 Sales Price Per unit 60 Contribution Per unit 37 Fixed Cost Fixed Mfg Ohs 252,000 Fixed SG&A 245,000 Calculate: (a) Income statement under variable costing (b)Reconcilliation of profit under Absorption Costing and variable costing

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