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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