Income statement and additional data

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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: EM131796976

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