all Verizon 9:05 AM instructure-uploads.s3.amazonaws.com S4 per unit Direct materials cost expenses S2 per unit Direct labor cost Variable S&A $8 per unit Fixed S&A expenses 200,000 per year Variable overhead cost S3 per unit Fixed overhead cost $600,000 per year Sales price/unit $40 Units Produced Units Sold Units in 60,000 60,000 60,000 45,000 2009 2010 15,000 2011 60,000 75,000 UNITS PRODUCED EXCEED UNITS SOLD ICEAGE COMPANY Income Statement (Absorption Costing) For Year Ended December 31, 2010 Sales Cost of goods sold Gross margin S&A expenses Net income ICEAGE COMPANY Income Statement (Variable Costing) For Year Ended December 31, 2010 Sales Variable production costs Variable S&A expenses Contribution margin Fixed expenses Fixed overhead Fixed S&A expenses Net income Variable Costing and Absorption Costing UNITS PRODUCED ARE LESS THAN UNITS SOLD ICEAGE COMPANY Income Statement (Absorption Costing) For Year Ended December 31, 2011 Sales Cost of goods sold Gross margin S&A expenses Net income