Income statement based on the variable costing concept

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Reference no: EM13867037

During the first month of operations ended May 31st, 2012, Dorm Fridge Company manufactured 12,500 microwaves, of which 11,700 were sold. Operating data for the month are summarized as follows:

Sales.............................2,106,000

Manufacturing costs:

Direct materials....................$1,050,000

Direct Labor...........................$312,500

Variable manufacturing cost.............$268,750

Fixed manufacturing cost..........137,500 1,768,750

Selling and admin expenses:

Variable.......$169,650

Fixed.............76,050 245,700

1. Prepare an income statement based on the absorption costing concept

2. Prepare an income statement based on the variable costing concept

3. Explain the reason for the difference in the amount of income from operations reported in (1) and (2)

Reference no: EM13867037

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