Variable costing 2017

Sales $ 6,000,000
Less Variable costs
Variable cost of good sold (VMC)
Beginning inventory 0
Plus Variable manufacturing costs 1,600,000
Cost of goods availble for sale 1,600,000
Deduct ending inventory 400,000
Variable cost of good sold 1,200,000
Variable non-manufacturing costs 1,110,000
Contribution margin 3,690,000
Less Fixed costs
Fixed manufacturing costs 1,080,000
Fixed non-manufacturing costs 1,380,000
Operating income 1,230,000

FMC per unit 135

2018 Absorption costing
6,500,000 Revenues
Less cost of good sold
Beginning inventory
400,000 Plus Variable manufacturing costs
1,000,000 Allocated fixed manufacturing costs
1,400,000 Cost of goods availble for sale
100,000 Deduct ending inventory
1,300,000 Cost of good sold
1,202,500
3,997,500 Gross margin
Less Non-manufacturing costs
1,080,000 Variable non-manufacturing costs
1,380,000 Fixed non-manufacturing costs
1,537,500 Operating income
 2017
$ 6,000,000

-
1,600,000 8000*200
1,080,000 8000*135
2,680,000
670,000 2000*335
2,010,000

3,990,000

1,110,000
1,380,000
1,500,000
 Variable costing 2017 Absorpti
Revenues Revenues
Less Variable costs Less cost of good sold
Variable cost of good sold
Beginning inventory
Plus Variable manufacturing costs
Cost of goods availble for sale
Deduct ending inventory
Variable cost of good sold
Variable non-manufacturing costs
Contribution margin Gross margin
Less Fixed costs Less Non-manufacturing
Fixed manufacturing costs
Fixed non-manufacturing costs
Operating income Operating income
 Absorption costing 2017 2018
Revenues
Less cost of good sold
Beginning inventory
Plus Variable manufacturing costs
Allocated fixed manufacturing costs
Cost of goods availble for sale
Deduct ending inventory
Cost of good sold

Gross margin
Less Non-manufacturing costs
Variable non-manufacturing costs
Fixed non-manufacturing costs
Operating income