Liquid Energy
Contribution Margin Income Statement (Variable Costing)
Month Ended March 31
	Sales revenue				$390,000
	Deduct: Variable expenses:
		Variable cost of goods sold:
			Beginning finished goods inventory	$0
			Variable cost of goods manufactured	260,000
			Variable cost of goods available for sale	260,000
			Ending finished goods inventory	(60,000)
			Variable cost of goods sold	200,000
		Sales commission expense		30,000	(230,000)
	Contribution margin				160,000
	Deduct: Fixed expenses:
		Fixed manufacturing overhead		130,500
		Fixed marketing and administrative expenses		20,000	(150,500)
	Operating income				$9,500

	Absorption		Variable
	Costing		Costing
Direct materials	$6.00		$6.00
Direct labour	3.00		3.00
Variable manufacturing overhead	11.00		11.00
Fixed manufacturing overhead	9.00	*
Total cost per case	$29.00		$20.00

*$130,500 fixed manufacturing overhead/14,500 cases= $9

Sales price per case

$39.00

Sales commission per case

$3.00

Units in beginning inventory 0003,000

Liquid Energy incurs the following costs for its powdered sports beverage mix in March:

Suppose that during April, the company produces 14,500 cases of powdered drink mix and sells 16,000 cases. Sale price, variable cost per case, and total fixed expenses remain the same as in March. Prepare the April income statement using variable costing.Prepare the April income statement using variable costing.

Liquid Energy

Contribution Margin Income Statement (Variable Costing)

Month Ended April 30

Variable cost of goods sold: