Following absorption costing income statement

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Reference no: EM131099624

(TCO E) The following absorption costing income statement and additional data are available from the accounting records of Bernon Co. for the month ended May 31, XXXX. During the accounting period,17,000 units were manufactured and sold at a price of $60 per unit. There were no beginning inventories.

Bernon Co. Absorption Costing Income Statement for the Month Ended May 31, XXXX
Sales (17,000 @ $60)	$1,020,000
Cost of goods sold	612,000
Gross profit	$ 408,000
Selling and administrative expenses	66,000
Income from operations	$ 342,000

Additional Information:

Cost	Total Cost	Number of Units	Unit Cost
Manufacturing costs:
Variable	$442,000	17,000	$26
Fixed	170,000	17,000	10
Total	$612,000		$36

Selling and administrative expenses:
Variable ($2 per unit sold)	$34,000
Fixed	32,000
Total	$66,000

Required: Prepare a new income statement for the year using variable costing. Comment on the differences, if any, between the absorption costing and the variable costing income statements.

Reference no: EM131099624

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