Absorption Statement to Variable Costing Statement as follows:

Qtr 1 Qtr2 % change

Sales 750,000 787500 5%

CGS 340,000 346,000

Gross Profit 410,000 441500

Op Exp. 116,000 117,800

Op Inc. 294,000 323,700 10%

Use the DOL to re-state each quarter 1 into a variable costing statement.

what is the DOL for quarter 1?

What is the CM for quarter 1?

Step2: use the CM ratio of quarter 1 to format a variable costing statement for quarter 2

Prepare to variable costing statements for quarter 1 and quarter 2