During 2020, Rafael Corp. produced55,000units and sold49,500for $17per unit. Variable manufacturing costs were $5per unit. Annual fixed manufacturing overhead was $99,000. Variable selling and administrative costs were $2per unit sold, and fixed selling and administrative expenses were $18,000.

Prepare an absorption-costing income statement.

Rafael Corp. Income Statement-Absorption Costing For the Year Ended December 31, 2020 Sales 841,500 Cost of goods sold Volume variance 247500 Add * Cost of goods sold 336,600 Ending inventory Less # Selling and administrative expenses # 504,900 99.000 Less # Selling and administrative expenses + 18,000 Gross margin 387.900