Jackson Company produces plastic that is used for injection-molding applications such as gears for small motors. In 2016, the first year of operations, Jackson produced 5,400 tons of plastic and sold 4,725 tons. In 2017, the production and sales results were exactly reversed. In each year, the selling price per ton was $2,300, variable manufacturing costs were 16% of the sales price of units produced, variable selling expenses were 8% of the selling price of units sold, fixed manufacturing costs were $3,618,000, and fixed administrative expenses were $500,000.

JACKSON COMPANY Income Statement For the Year Ended December 31, 2017 Variable Costing Sales Variable Cost of Goods Sold Inventory, January 1 Variable Costs of Goods Manufactured Variable Costs of Goods Available for Sale v Inventory, December 31 Variable Cost of Goods Sold Variable Selling Expenses Contribution Margin Fixed Manufacturing Overhead Fixed Administrative Expenses Net Income/(Loss) 12,420,000