On July 31, 2010, the end of the first month of operations, Hilton Company prepared the following income statement, based on the absorption costing concept:

Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $48,000 and the variable selling and administrative expenses were$34,000.

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Sales (20,000 units) Cost of goods sold: Cost of goods manufactured Less ending inventory (4,000 units) Cost of goods sold Gross profit Selling and administrative expenses Income from operations $1,400,000 $1,050,000 175,000 875,000 $ 525,000 75,000 $ 450,000