Frankenreiter Inc.

Variable Costing Income Statement

For the Year Ended December 31, 20Y1Sales$860,000Variable cost of goods sold:Variable cost of goods manufactured$473,800Inventory, December 31(61,800)Total variable cost of goods sold412,000Manufacturing margin$448,000Total variable selling and administrative expenses104,000Contribution margin$344,000Fixed costs:Fixed manufacturing costs$218,500Fixed selling and administrative expenses68,000Total fixed costs286,500Income from operations$57,500