Cost of Goods Manufactured, using Variable Costing and Absorption Costing

On December 31, the end of the first year of operations, Frankenreiter Inc., manufactured 3,500 units and sold 3,000 units. The following income statement was prepared, based on the variable costing concept:

Frankenreiter Inc. Variable Costing Income Statement For the Year Ended December 31, 20Y1
Sales			$1,410,000
Variable cost of goods sold:
Variable cost of goods manufactured	$791,000
Inventory, December 31	(113,000)
Total variable cost of goods sold			678,000
Manufacturing margin			$732,000
Total variable selling and administrative expenses			168,000
Contribution margin			$564,000
Fixed costs:
Fixed manufacturing costs	$360,500
Fixed selling and administrative expenses	114,000
Total fixed costs			474,500
Income from operations			$89,500

Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.

On December 31, the end of the first year of operations, Frankenreiter Inc., manufactured 3,500 units and sold 3,000 units. The following income statement was prepared, based on the variable costing concept Frankenreiter Inc. Variable Costing Income Statement For the Year Ended December 31, 20Y1 Sales $1,410,000 Variable cost of goods sold Variable cost of goods manufactured $791,000 Inventory, December 31 (113,000) Total variable cost of goods sold Manufacturing margin Total variable selling and administrative expenses Contribution margin Fixed costs: 678,000 $732,000 168,000 $564,000 Fixed manufacturing costs $360,500 Fixed selling and administrative expenses 114,000 474,500 Total fixed costs Income from operations Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept Variable costing Absorption costing $89,500