Required information Exercise 19-7 Income reporting under absorption costing and variable costing LO P2 (The following information applies to the questions displayed below.) Oak Mart, a producer of solid oak tables, reports the following data from its second year of business. 320 per unit 110,000 units 113,250 units 3,254 unito 438, 750 260,000 698,750 $ $ Sales price per unit Units produced this year Units sold this year Units in beginning-year inventory Beginning inventory costs Variable (3,250 units $135) Fixed (3,250 units * $80) Total Manufacturing costs this year Direct materials Direct labor Overhead costs this year Variable overhead Pixed overhead Selling and administrative costs this year Variable Fixed 42 per unit $ 68 per unit $3,600,000 $7,400,000 $1,500,000 4,200,000 Exercise 19-7 Part 2 2 2. Prepare the current-year income statement for the company using absorption costing. OAK MART COMPANY Absorption Costing Income Statement Sales Less: Cost of goods sold Beginning inventory Manufacturing costs this year Direct materials Direct labor Variable overhead costs Fixed overhead costs ces Cost of goods sold Gross margin Selling general and administrative expenses Fixed selling and administrative costs Variable selling and administrative expenses Net income (loss) Net income under variable costing is higher than net income under absorption costing by: