B c D E Problem 2 Walsh Company manufactures 30,000 units during July. There were no units in inventory on July 1. Informatin on costs and expenses for July is as follows: Total $ Number of units Unit $ Manufacturing costs Variable 660,000 30,000 22 Fixed 300,000 30,000 10 Total manufacturing costs 960,000 Selling and Administrative expenses Variable 200,000 25,000 8 Fixed 160,000 5. Total selling and administrative expenses 360,000 5 Required: B If the company sells 25,000 units at $75 (units manufactured exceeds units sold), prepare an income statement for July using: 0 A Absorption Costing 1 B Varibale Costing 2 Solution: 24 A 25 Absorption Costing Income Statement $ 26 Sales 27. Costs of Goods Sold 28 Costs of Goods Manufactured 29 Less Ending Inventory 30 Total Costs of Goods Sold 31 Gross Profit 32 less Selling and Administrative expenses 33 Income from Operation 34 35 B 36 Variable Costing Income Statement $ $ 37 Sales 38 Variable costs of Goods Sold 39 Variable Manufacturing costs 40 less Ending Inventory 41 Total Variable COGS 42 Manufacturing Margin Less Variable Selling and Administrative Expenses 44 Contribution margin 45 Less Fixed costs Fixed manufacturing costs 47 Fixed Selling and Administrative expenses 48. Total Fixed costs 49 Income from Operation 50 51 52 53 54 48 55