ariable and Absorption Costing Ansara Company had the following abbreviated income statement for the year ended December 31, 20Y2: (in millions) $18,769 $15,471 2,049 $17,520 $1,249 Sales Cost of goods sold Selling, administrative, and other expenses Total expenses Income from operations Assume that there were $3,860 million fixed manufacturing costs and $1,170 million fixed selling, administrative, and other costs for the year. The finished goods inventories at the beginning and end of the year from the balance sheet were as follows: January 1 December 31 Assume that 30% of the beginning and ending inventory consists of fixed costs. Assume work in process and materials inventory were unchanged during the period. a. Prepare an income statement according to the variable costing concept for Ansara Company for 20Y2. Roun to nearest million. $2,354 million $2,408 million Ansara Company Variable Costing Income Statement For the Year Ended December 31, 20Y2 (in millions) Ansara Company Variable Costing Income Statement For the Year Ended December 31, 20Y2 (in millions) Variable cost of goods sold: Beginning inventory Fixed costs: Accounting numeric field b. Explain the difference between the amount of income from operations reported under the absorption costing and variable costing concepts The income from operations under the variable costing concept income from operations under the absorption costing concept when the inventories either increase or decrease during the year. In this case, Ansara's inventory be the same as the meaning it sold Fixed costs b. Explain the difference between the amount of income from operations reported under the absorption costing and variable costing concepts The income from operations under the variable costing concept income from operations under the absorption costing concept when the inventories either increase or decrease during the year. In this case, Ansara's inventory than it produced. As a result, the income from operations under the variable costing concept will be be the same as the meaning it sold than the income from operations under the absorption costing concept. The reason is because the variable costing concept incurred, regardless of changes in inventory balances. deduct the fixed costs in the period that they are Frankenreiter Inc. Variable Costing Income Statement For the Year Ended December 31, 20Y1 $1,680,000 Sales Variable cost of goods sold: Variable cost of goods manufactured $949,400 Inventory, December 31 (141,400) Total variable cost of goods sold Manufacturing margin Total variable selling and administrative expenses Contribution margin Fixed costs: 808,000 $872,000 200,000 $672,000 Fixed manufacturing costs $432,400 Fixed selling and administrative expenses 136,000 Total fixed costs Income from operations Determine the unit cost of goods nmenufactured, based on (a) the variable costing concept and (b) the 568,400 $103,600 absorption costing concept. Variable costing Absorption costing
