CH 20

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

Sullivan Equipment Company

Variable Costing Income Statement

For the Month Ended March 31

1	Sales (45,000 units)		$5,625,000.00
2	Variable cost of goods sold:
3	Variable cost of goods manufactured	$2,360,000.00
4	Inventory, March 31 (14,000 units)	(560,000.00)
5	Total variable cost of goods sold		1,800,000.00
6	Manufacturing margin		$3,825,000.00
7	Variable selling and administrative expenses		1,372,500.00
8	Contribution margin		$2,452,500.00
9	Fixed costs:
10	Fixed manufacturing costs	$576,000.00
11	Fixed selling and administrative expenses	484,000.00
12	Total fixed costs		1,060,000.00
13	Income from operations		$1,392,500.00

Required:

Prepare an income statement under absorption costing. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if required. Enter all amounts as positive numbers. Round your cost per unit answer to two decimal places and final answers to nearest whole dollar.