Motors assembles and sells motor vehicles and uses standard costing. Actual data and variable costing and absorption costing income statements relating to April and May 2020 are as follows:

	A	B	C
1		April	May
2	Unit data:
3	Beginning inventory	0	150
4	Production	500	400
5	Sales	350	520
6	Variable costs:
7	Manufacturing cost per unit produced	$10,000	$10,000
8	Operating (marketing) cost per unit sold	3,000	3,000
9	Fixed costs:
10	Manufacturing costs	$2,000,000	$2,000,000
11	Operating (marketing) costs	600,000	600,000

The selling price per vehicle is $24,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.

			April 2020		May 2020
Revenues				$8,400,000		$12,480,000
Variable costs:
	Beginning inventory		$0		$1,500,000
	Variable manufacturing costs		5,000,000		4,000,000
	Cost of goods available for sale		5,000,000		5,500,000
	Less:	Ending inventory	(1,500,000)		(300,000)
	Variable cost of goods sold		3,500,000		5,200,000
	Variable operating costs		1,050,000		1,560,000
	Total variable costs			4,550,000		6,760,000
Contribution margin				3,850,000		5,720,000

Fixed costs:
	Fixed manufacturing costs		2,000,000		2,000,000
	Fixed operating costs		600,000		600,000
	Total fixed costs			2,600,000		2,600,000
Operating income				$1,250,000		$3,120,000

		April 2020		May 2020
Revenues				$8,400,000			$12,480,000
Cost of goods sold:
	Beginning inventory		$0		$2,100,000
	Variable manufacturing costs		5,000,000		4,000,000
	Allocated fixed manufacturing costs		2,000,000		1,600,000
	Cost of goods available for sale		7,000,000		7,700,000
	Less:	Ending inventory	(2,100,000)		(420,000)
	Adjustment for production-volume variance		0		400,000	U
	Cost of goods sold			4,900,000			7,680,000
Gross margin				3,500,000			4,800,000

Operating costs:
	Variable operating costs		1,050,000		1,560,000
	Fixed operating costs		600,000		600,000
	Total operating costs			1,650,000		2,160,000
Operating income				$1,850,000		$2,640,000

The variable manufacturing costs per unit of Nascar Motors are as follows:

	A	B	C
1		April	May
12	Direct material cost per unit	$6,700	$6,700
13	Direct manufacturing labor cost per unit	1,500	1,500
14	Manufacturing overhead cost per unit	1,800	1,800

1. Prepare income statements for Nascar Motors in April and May 2020 under throughput costing.

2. Contrast the results in requirement 1 with the absorption and variable costing income statements presented.

3. Give one motivation for Nascar Motors to adopt throughput costing.