21

Green Company sells its product for $10400per unit. Variable costs per unit are: manufacturing, $5900; and selling and administrative, $130. Fixed costs are: $26400manufacturing overhead, and $36400selling and administrative. There was no beginning inventory at 1/1/18. Production was24units per year in 2018-2020. Sales were24units in 2018,20units in 2019, and28units in 2020. Income under absorption costing for 2019 is

$24600.

$29000.

$31600.

$53600.

22

In income statements prepared under absorption costing and variable costing, where would you find the terms contribution margin and gross profit?

Contribution marginGross profit

In absorption-costing income statementIn variable-costing income statement

In absorption-costing income statementIn both income statements

In variable-costing income statement

In absorption-costing income statement

In both income statementsIn variable-costing income statement