Consider the following income statements for Company:

Required:

1. Identify which income statement is prepared using each of the following costing met

Absorption costing, Variable costing, and Throughput costing.

2. For each costing method, identify one assumption associated with its use.
3. Explain why Company might produce all three types of income statements for the same period.

Income Statement #1 Revenue $ Direct costs Contribution margin Fixed costs Operating income 1,800 (300) 1,500 (500) 1,000 Income Statement #2 Income Statement #3 Revenue $ 1,400 Revenue $ 2,000 Cost of good sold (200) Direct materials (800) Gross margin 1,200 Throughput margin 1,200 Nonproduction costs (300) Other costs (400) Operating income 900 Operating income 800