1. Use the income statements on the Absorption Statement and Variable Statement panels to complete the following table for the original p Then prepare similar income statements at a production level 10,000 units higher and add that information to the table. Assume that total fi- variable costs, unit sales price, and the sales levels are the same at both production levels. CH Additional Income From Operations Original Additional Production 10,000 Level-Variable Units-Absorption $160,000 Original Production Level-Absorption $220,000 10,000 Units-Variable Points: Feedback Charl Mark Saxon, Inc. Absorption Costing Income Statement For the Year Ended December 31 1 Sales $1,125,000.00 2 Cost of goods sold: 3 $0.00 Beginning inventory Cost of goods manufactured 4 840,000.00 5 Ending inventory (210,000.00) 6 Total cost of goods sold 630,000.00 7 Gross profit $495,000.00 8 Selling and administrative expenses 275,000.00 Income from operations $220,000.00 Variable Statement 1 Sales $1,125,000.00 2 Variable cost of goods sold: 3 $0.00 Beginning inventory Variable cost of goods manufactured 4 600,000.00 5 (150,000.00) Ending inventory Total variable cost of goods sold 6 450,000.00 7 Manufacturing margin $675,000.00 8 Variable selling and administrative expenses 210,000.00 9 Contribution margin $465,000.00 10 Fixed costs: 11 $240,000.00 Fixed manufacturing costs Fixed selling and administrative expenses 12 65,000.00 13 Total fixed costs 305,000.00 14 Income from operations $160,000.00 1. Use the income statements on the Absorption Statement and Variable Statement panels to complete the following table for the original p Then prepare similar income statements at a production level 10,000 units higher and add that information to the table. Assume that total fi- variable costs, unit sales price, and the sales levels are the same at both production levels. CH Additional Income From Operations Original Additional Production 10,000 Level-Variable Units-Absorption $160,000 Original Production Level-Absorption $220,000 10,000 Units-Variable Points: Feedback Charl Mark Saxon, Inc. Absorption Costing Income Statement For the Year Ended December 31 1 Sales $1,125,000.00 2 Cost of goods sold: 3 $0.00 Beginning inventory Cost of goods manufactured 4 840,000.00 5 Ending inventory (210,000.00) 6 Total cost of goods sold 630,000.00 7 Gross profit $495,000.00 8 Selling and administrative expenses 275,000.00 Income from operations $220,000.00 Variable Statement 1 Sales $1,125,000.00 2 Variable cost of goods sold: 3 $0.00 Beginning inventory Variable cost of goods manufactured 4 600,000.00 5 (150,000.00) Ending inventory Total variable cost of goods sold 6 450,000.00 7 Manufacturing margin $675,000.00 8 Variable selling and administrative expenses 210,000.00 9 Contribution margin $465,000.00 10 Fixed costs: 11 $240,000.00 Fixed manufacturing costs Fixed selling and administrative expenses 12 65,000.00 13 Total fixed costs 305,000.00 14 Income from operations $160,000.00
