Absorption and varible costing income statements for 2 months analysis
During the first month of operations ended March 31, 2016, Hip and Conscious Clothing
Company produced			55,000	designer cowboy hats, of which				51,900	were sold
Operating data for the month are summarized as follows:
1	Sales							$804,450
2	Manufacturing costs:
3	Direct materials					$467,500
4	Direct labor					$126,500
5	Variable manufacturing cost					$77,000
6	Fixed manufacturing cost					$55,000		$726,000
7	Selling and administrative expenses:
8	Variable					$25,950
9	Fixed					$25,950		$51,900
During April, Hip and Conscious Clothing produced						48,800	designer cowboy hats
and	sold	51,900	cowboy hats. Operating data for April are summarized as follows:
1	Sales							$804,450
2	Manufacturing costs:
3	Direct materials					$414,800
4	Direct labor					$112,240
5	Variable manufacturing cost					$68,320
6	Fixed manufacturing cost					$55,000		$650,360
7	Selling and administrative expenses:
8	Variable					$25,950
9	Fixed					$25,950		$51,900
1a. Using the absorption costing concept, prepare income statements for (a) March
Hip and Conscious Clothing Company
Absorption Costing Income Statement
	For the Month Ended March 31, 2016
1	Sales
2	COGS
3	Cost of goods manufactured
4	Less ending inventory
5	Cost of goods sold
6	Gross Profit
7	Selling and administrative expenses
8	Income from operations
1b. Using the absorption costing concept, prepare income statements for (b) April.
Hip and Conscious Clothing Company
Absorption Costing Income Statement
	For the Month Ended April 30, 2016
1	Sales
2	COGS
3	Cost of goods manufactured
4	Beginning Inventory
5	Cost of goods sold
6	Gross Profit
7	Selling and administrative expenses
8	Income from operations
2a. Using the variable costing concept, prepare income statements for (a) March
Hip and Conscious Clothing Company
Variable Costing Income Statement
	For the Month Ended March 31, 2016
1	Sales
2	Variable COGS
3	Variable cost of goods manufactured
4	Less ending Inventory
5	Variable cost of goods sold
6	Manufacturing margin
7	Variable selling and administrative expenses
8	Contribution margin
9	Fixed Costs
10	Fixed manufacturing costs
11	Fixed selling & Admin expenses
12	Income from Operations
2b. Using the variable costing concept, prepare income statements for (b) April.
Hip and Conscious Clothing Company
Variable Costing Income Statement
	For the Month Ended April 30, 2016
1	Sales
2	Variable COGS
3	Variable cost of goods manufactured
4	Beginning Inventory
5	Variable cost of goods sold
6	Manufacturing margin
7	Variable selling and administrative expenses
8	Contribution margin
9	Fixed Costs
10	Fixed manufacturing costs
11	Fixed selling & Admin expenses
12	Income from Operations