Refer to the data in Exercise 2.48. Compute absorption cost of goods sold, gross margin, and operating

Question:

Refer to the data in Exercise 2.48. Compute absorption cost of goods sold, gross margin, and operating Absorption Costing income. Why is operating income different from one month to the next?
(LO 7) Cee ae eee re Seer Exercise 2.51 Portland Security Company sells a security system key pad for $400 p e r u n i t . T h i s p r o d u c t h a s t h e f o l - C o m p a r i s o n o f I n c o m e l o w i n g u n i t c o s t s . A m o u n t s u n d e r A b s o r p t i o n a n d V a r i a b l e D i r e c t i m a t e n i a l s é . c e b t a t M I A N M e o d s 20) 2 o e S G i n y h H a a c d e r g a h e e e e$ 164.00 Costing DirechlaWorrenitess 4... ites sy) ag. Sela re GEE coh Oe a Ase ok re 70.80 (LO 6, 8) Manufacturing overhead (based on planned production of 5,000 units):
WANA Gre ster coe sunnah oe tient ee eer ae tee tae ae 31.20 PI OGD ewan str solgy Reto usesi ec ic deactn te phd ea cea d A pcg EN a he 28.00 Selling and administrative costs (based on 6,500 units sold):
Wana blot... sc saat sae nen degrees yet ad ce aie pat ic ar een eae a 20.80 FIRSG lave thn aintcads taS ekt aah i a ll iy eee oe ace way, raed ee eee 14.00 This year, 1,500 units were in beginning finished-goods inventory, 5,000 units were produced, and 6,500 units were sold. The beginning inventory was valued at $266 p e r u n i t u s i n g v a r i a b l e c o s t i n g a n d a t$ 294 per unit using absorption costing. There was no beginning or ending work-in-process inventory.
Required

a. Prepare an income statement for the year using variable costing and a contribution-margin format.

b. Would reported operating profits be more, less, or the same if absorption costing were used?
Support your conclusions with an income statement using absorption costing.

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