Gardner Company produces plastic that is used for injection-molding applications such as gears for small motors. In 2013, the first year of operations, Gardner produced 5,500 tons of plastic and sold 3,575 tons. In 2014, the production and sales results were exactly reversed. In each year, the selling price per ton was $2,200, variable manufacturing costs were 15% of the sales price of units produced, variable selling expenses were 11% of the selling price of units sold, fixed manufacturing costs were $3,245,000, and fixed administrative expenses were $514,000. administrative expenses were $514,000.

Income Statement For the Year Ended December 31, 2013 Variable Costing Sales 7,865,000 Variable Cost of Goods Sold Inventory, January 1 Variable Costs of Goods Manufactured Variable Costs of Goods Available for Sale Inventory, December 31 635,250 Variable Cost of Goods Sold Variable Selling Expenses 865150 Contribution Margin Fixed Manufacturing Overhead Fixed Administrative Expenses 3,245,000 514,000 3,759,000 Net Income/ (Loss) GARDNER COMPANY Income Statement For the Year Ended December 31, 2014 Variable Costing Sales 12,100,000 Variable Cost of Goods Sold Inventory, January1 Variable Costs of Goods Manufactured Variable Costs of Goods Available for Sale 1,815,000 Inventory, December 31 0 Variable Cost of Goods Sold 1,815,000 Variable Selling Expenses Contribution Margin Fixed Manufacturing Overhead Fixed Administrative Expenses 1,331,000 3,245,000 514,000 3,759,000 Net Income/ (Loss)