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. 320 per unit 115,000 units 118,000 units 3,000 units $ 405,000 240,000 645,000 $ Sales price per unit Units produced this year Units sold this year Units in beginning-year inventory Beginning inventory costs Variable (3,000 units * $135) Fixed (3,000 units $80) Total Manufacturing costs this year Direct materials Direct labor Overhead costs this year Variable overhead Fixed overhead Selling and administrative costs this Variable Fixed 40 per unit 62 per unit $3,220,000 $7,400,000 $1,416,000 4,600,000 Exercise 19-7 Part 1 1. Prepare the current-year Income statement for the company using variable costing. OAK MART COMPANY Variable Costing Income Statement Sales Less: Variable costs Beginning inventory Variable costs Required information OAK MART COMPANY Variable Costing Income Statement Sales Less: Variable costs Beginning inventory Variable costs Manufacturing cost this year Direct materials Direct labor 3,220,000 3,220,000 Variable overhead costs Total variable costs available Less: Ending finished goods inventory Variable cost of goods sold Variable selling and administrative expenses 1,416,000 Total variable costs 1,416,000 Contribution margin Less. Fixed expenses Fixed selling and administrative costs Fuced overhead costs Net income (loss) Exercise 19-7 Part 2 2. Prepare the current year income statement for the company using absorption costing. / OAK MART COMPANY Absorption Costing Income Statement / / Beginning inventory Manufacturing costs this year. / / Net income (loss) Fixed costs added to(subtracted from) inventory