Exercise 6-12 (Algo) Variable Costing Income Statement; Reconciliation (L06-2, L06-3) Whitman Company has just completed its first year of operations. The company's absorption costing Income statement for the year follows: White Company Income statement Sales 40,000 units $43.10 per unit) $ 1,724,000 Cost of goods sold (40,000 units $23 per unit) 920.000 Gross margin 804,000 selling and administrative expenses 460,000 Het operating Income $340,000 The company's selling and administrative expenses consist of $300,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $23 unit product cost given above is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (1250,000 - 50.000 unita) Absorption conting unit product cont Required: 1. Redo the company's income statement in the contribution format using variable costing 2. Reconcile any difference between the net operating income on your variable costing Income statement and the net operating income on the absorption costing income statement above. Required: 1. Redo the company's income statement in the contribution format using varlable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating Income on the absorption costing Income statement above. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Redo the company's income statement in the contribution format using variable costing. Whitman Company Variable Costing Income Statement Sales Variable expenses Variable cost of goods sold Variable selling and administrative $ 1,724,000 0 1,724,000 Contribution margin Fixed expenses Fixed manufacturing overhead Fixed selling and administrative expense 0 Net operating income $ 1,724.000 Required 2 > The company's selling and administrative expenses consist of $300,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $23 unit product cost given above is computed as follows: $ 11 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($250,000 - 50.000 units) Absorption conting unit product cost $ 23 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Reconcile any difference between the net operating income on your variable costing income statement and the net operating Income on the absorption costing income statement above. (Enter any losses or deductions as a negative value) Reconciliation of Variable Couting and Absorption Costing Not Operating incomes Variable costing net operating income Absorption conting net operating income
