Absorption Costing Income Statement On June 30, 2016, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on the variable costing concept: Sales (420,000 units) $7,450,000 Variable cost of goods sold: Variable cost of goods manufactured (500,000 units x $14 per unit) $7,000,000 Less ending inventory (80,000 units x $14 per unit 1,120,000 Variable cost of goods sold 5,880,000 $1,570,000 Manufacturing margin Variable s and administrative expenses 80,000 $1,490,000 Contribution margin Fixed costs: Fixed manufacturing costs $160,000 Fixed selling and administrative expenses 75,000 235,000 $1,255,000 Income from operations