Exercise 19-7 Income reporting under absorption costing and variable costing LO P2

[The following information applies to the questions displayed below.] Oak Mart, a producer of solid oak tables, reports the following data from its second year of business.

Sales price per unit	$	310	per unit
Units produced this year		115,000	units
Units sold this year		118,000	units
Units in beginning-year inventory		3,000	units
Beginning inventory costs
Variable (3,000 units $135)	$	405,000
Fixed (3,000 units $70)		210,000
Total	$	615,000
Manufacturing costs this year
Direct materials	$	42	per unit
Direct labor	$	68	per unit
Overhead costs this year
Variable overhead	$	3,600,000
Fixed overhead	$	7,200,000
Selling and administrative costs this year
Variable	$	1,450,000
Fixed		4,400,000

Exercise 19-7 Part 2

2. Prepare the current year income statement for the company using absorption costing.

2. Prepare the current year income statement for the company using absorption costing. OAK MART COMPANY Absorption Costing Income Statement Sales $ 37,760,000 Less: Variable costs Beginning inventory Manufacturing costs this year Direct materials Direct labor Variable overhead costs Fixed overhead costs Less: Ending inventory Variable selling and administrative expenses Total variable costs Contribution margin Fixed selling and administrative costs Fixed overhead costs Net income (loss) Fixed costs added to(subtracted from) inventory