Reference no: EM132902258

Question - Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statement under absorption costing for external reporting. For its first month of operations, 400 bikes were produced and 240 were sold; this left 160 bikes in ending inventory. The income statement information under variable costing follows.

Sales (240 × $1,775) $426,000

Variable product cost (240 × $600) 144,000

Variable selling and administrative expenses (240 × $70) 16,800

Contribution margin 265,200

Fixed overhead cost 64,000

Fixed selling and administrative expense 90,000

Net income $111,200

Required - Prepare this company's income statement for its first month of operations under absorption costing.