The unit product cost under variable costing is computed as follows:
Direct materials                                    $ 4
Direct labor                                               7
Variable manufacturing overhead           1
Variable costing unit product cost      $12
With this figure, the variable costing income statements can be prepared:
                                                                   Year 1                          Year 2
Unit sales                                                40,000 units             50,000 units            
 Sales                                                       $1,000,000               $1,250,000
Variable expenses:
 The variable cost of goods sold
($12 per unit)                                        480,000                   600,000
Variable selling and administrative
 expenses ( $2 per unit)                        80,000                    100,000
Total variable expenses                         560,000                   700,000
  
Contribution margin                               440,000                     550,000
   
Fixed expenses:
  Fixed manufacturing overhead            270,000                    270,000
Fixed selling and administrative             130,000                     130,000 
 expenses 
Total fixed expenses                               400,000                    400,000
Net operating income                             $40,000                     $150,000.
An annual record is a record that public organizations must provide annually to shareholders that describes their operations and economic situations. a report that gives unique information approximately what a corporation has completed and how successful it has been.
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