Absorption Costing Income Statement

On October $31,$ the end of the first month of operations, Maryville Equipment Company prepared the following income statement, based on the variable costing concept:

Maryville Equipment Company

Variable Costing Income Statement

For the Month Ended October $31$

Line Item Description Amount Amount

Sales $(9,400$ units$)$ $$582,800$

Variable cost of goods sold:

Variable cost of goods manufactured $$297,500$

Inventory, October $31(2,500$ units$)(62,500)$

Total variable cost of goods sold $(235,000)$

Manufacturing margin $$347,800$

Variable selling and administrative expenses $(150,400)$

Contribution margin $$197,400$

Fixed costs:

Fixed manufacturing costs $$59,500$

Fixed selling and administrative expenses $37,600$

Total fixed costs $(97,100)$

Operating income $$100,300$

Prepare an income statement under absorption costing. Round all final answers to whole dollars.

Maryville Equipment Company

Absorption Costing Income Statement

For the Month Ended October $31$

Line Item Description Amount Amount

Sales

$Sales

$582,800$

Cost of goods sold:

Cost of goods manufactured

$Cost of goods manufactured

$357,000$

Inventory, October $31$

Inventory, October $31$

Total cost of goods sold

Total cost of goods sold

Gross profit

$Gross profit

Selling and administrative expenses

Selling and administrative expenses

Operating income

$Operating income