In May, VitaSport produced $14,000$ cases of powdered drink mix and sold $16,000$ cases, of which $2,000$ were produced in April. The total April production was $15,000.$ The sales price was $$25$ per case, variable costs were $$11$ per case $($ $$8$ manufacturing and $$3$ selling and administrative$),$ and total fixed costs were manufacturing and $$24,000$ selling and administrative$).$ VitaSport's May income statement using variable costing follows:

View the variable costing income statement.

Read the requirements.

Requirement $1.$ Prepare the May income statement using absorption costing.

Variable Costing Income Statement

VitaSport

Income Statement $($Variable Costing$)$

Month Ended May $31$

Net Sales Revenue

Variable Costs:

Variable Manufacturing Overhead

Variable Selling and Administrative Costs

Contribution Margin

Fixed Costs:

Fixed Manufacturing Overhead

Fixed Selling and Administrative Costs

Operating Income

Requirements

Prepare the May income statement using absorption costing.

Is operating income using absorption costing higher or lower than variable costing income? Explain why.

Determine the balance in Finished Goods Inventory as of May $31.$

$\backslash$table$[[\backslash$table$[[$VitaSport$],[$Income Statement $($Variable Costing$)],[$Month Ended May $31]]],[$Variable Costs:$],[$Variable Manufacturing Overhead,$$,128,000,],[$Variable Selling and Administrative Costs,,$48,000,176,000],[$Contribution Margin,,,$224,000],[$Fixed Costs:$],[$Fixed Manufacturing Overhead,,$56,000,],[$Fixed Selling and Administrative Costs,,$24,000,80,000],[,$$$,=144,000$