Exercise 20-6 Absorption costing income statement On May 31, the end of the first month of operations, Trendwest Office Equipment Company prepared the following income statement, based on the variable costing concept: sales (12000) units ................................ $648000 variable cost of good sold variable cost of goods manufactured ........$311040 less inventory may 31 (2400) UNITS .................$ 51840 ------------ variable cost of good sold $ 259200 ________ manufacturing margin $ 388800 variable selling and administration expenses $ 168000 ________ contribution margin...................................................... $220800 fixed costs : fixed manufactured costs......................................$ 64800 fixed selling and administration expenses $ 51840 116640 ___________ ------------ income from operation 104160 ...................... Prepare an income statement under absorption costing. Enter all amounts as positive numbers. TRENDWEST OFFICE EQUIPMENT COMPANY Absorption Costing Income Statement For the Month Ended May 31, 2010 Sales _____________ Cost of goods sold: _________________ Less inventory, May 31 ____________ Cost of goods sold ___________ Gross profit ____________ Selling and administrative expenses ___________________ Income from operations _________________________