During 2022, Metlock Corp. produced 36,800 units and sold 36,800 for $14.00 per unit. Variable manufacturing costs were $5.00 per unit. Annual fixed manufacturing overhead was $73,600 ($2.00 per unit). Variable selling and administrative costs were $2.00 per unit sold, and fixed selling and administrative expenses were $18,400. Suppose the accountant for Metlock Corp. uses normal-absorption costing and uses the budgeted volume of 46,000 units to allocate the fixed overhead rather than the actual production volume of 36,800 units. The company expenses production volume variance to cost of goods sold in the accounting period in which it occurs.

Manufacturing cost = $6.60/ unit

Prepare a normal-absorption-costing income statement for the first year of operation. MetlockCorp. Income Statement-Normal-Absorption Costing For the Year Ended December 31, 2022 Sales 515200 Cost of goods sold : Beginning inventory $ 0 Add V: Costs of goods manufactured 242880 i Cost of goods sold 242880 i Add : Volume variance 18400 261280 Gross margin 253920 Less . Selling and administrative expenses (92000) i Operating income $ 161920