Question

During 2019, Basler Manufacturing produced 60,000 units and sold 55,000 for $10 per unit. Variable manufacturing costs were $4 per unit. Annual fixed manufacturing overhead was $120,000 ($2 per unit). Variable selling and administrative costs were $1 per unit sold, and fixed selling and administrative costs were $30,000.
Required:
Prepare a variable costing income statement.

Answer 1

Answer:

Net operating income= 125,000

Explanation:

First, we need to calculate the total variable cost:

Total variable cost= 55,000*(4 + 1)=

Variable costing income statement:

Sales= 55,000*10= 550,000

Total variable cost= (275,000)

Total contribution margin= 275,000

Annual fixed manufacturing overhead= (120,000)

Fixed selling and administrative costs= (30,000)

Net operating income= 125,000