Contribution Margin Data Manufacturing Decisions Absorption Statement Saxon, Inc. Absorption Costing Income Statement For the Year Ended December 31 1 Sales $1,200,000.00 2 Cost of goods sold: 3 $0.00 4 Beginning inventory Cost of goods manufactured Ending inventory 800,000.00 (200,000.00) 5 6 Total cost of goods sold 600,000.00 I 2 Gross profit $600,000.00 Selling and administrative expenses 275,000.00 $325,000.00 Income from operations 9 Variable Statement Saxon, Inc. Variable Costing Income Statement For the Year Ended December 31 $1,200,000.00 $0.00 560,000.00 1 Sales 2 Variable cost of goods sold: 3 Beginning inventory * Variable cost of goods manufactured 5 Ending inventory Total variable cost of goods sold Manufacturing margin Variable selling and administrative expenses . Contribution margin (140,000.00) 6 420,000.00 $780,000.00 210,000.00 $570,000.00 10 Fixed costs: $240,000.00 Fixed manufacturing costs Fixed selling and administrative expenses 12 65,000.00 Total fixed costs 305,000.00 $265,000.00 14 Income from operations Print Item Mastery Problem: Variable Costing for Management Analysis Absorption vs. Variable Method Comparison Absorption Statement Variable Statement Variable Statement Manufacturing Decisions Method Comparison Shaded colla havet Shaded cells have fe Review the income statements on the Absorption Statement and Variable Statement panels, then complete the following table. The company's sales price per unit is $80,00 number of units in ending inventory is 5,000. Amount 15,000 $14.00 Item Number of units sold Variable sales and administrative cost per unit Number of units manufactured Variable cost of goods manufactured per unit Fixed manufacturing cost per unit 20,000 $28.00 $12.00 Points: Do not produce the extra 10.000 units. The increase in income from operations under absorption costing is due toxed manufacturing costs being hervento the additional inventory will lead to higher handling, storage, financing, and obsolescence costs. Produce the extra 10,000 units, Income from operations will be increased, and the production manager will receive praise for creating higher protits. Income from operations $265,000.00 Check Me Mastery Problem: Variable Costing for Management Analysis Absorption vs. Variable Method Comparison Absorption Statement Variable Statement Variable Statement Manufacturing Decisions Shaded cells have feedback X 1. Use the income statements on the Absorption Statement and Variable Statement panels to complete the following fabio for the original production level. Then prepare similar income statements at a production level 10,000 units higher and add that information to the table. Assume that rola Mixed costs, unit variable costs, unt sales price, and the sales levels are the same at both production levels. Original Production Level-Absorption Income From Operations Original Additional Production 10,000 Level-Variable Units-Absorption S Additional 10,000 Units-Variable IS Points 074 Feedback Check My Work Following the examples on the Absorption Statement and Variable Statement panels, recompute income from operations under the absorption and variable cost methods. given that the additional units are manufactured. Don't forget that fixed costs will remain the same at any production level within the relevant range. 2. What is the change in income from operations from producing 10,000 additional units under absorption costing? Is Next Check My Work Email Instructor Save and Exit Submit Assignment for a All work saved. For Management Analysis Absorption vs. Variable Method Comparison Absorption Statement Variable Statement Variable Statement Manufacturing Decisions Shredded cols have feedback 2. What is the change in income from operations from producing 10.000 additional units under absorption conting? $ Points 071 Feedback Check My Work Review your chart and determine the change in income from operations, focusing only on the change in absorption costing amounts 3 What is the change in income from operations from producing 10,000 additional units under variable costing? Points 0/1 Feedback Check My Work Review your chart and determine the change in income from operations, focusing only on the change in variable costing amounts Check My Work Next > All work saved. Email Instructor Save and Ext Submit Assignment for Grading MacBook Air