Requirement 2 Hampshire Company Absorption Costing Income Statement Units $ Sales 60,000 $12.50 Variable Cost of Goods Sold: Beginning Inventory Direct Materials 80,000 $3.00 Direct Labor 80,000 $1.50 Manufacturing Overhead 80,000 $0.40 Total Variable Costs Allocated Fixed Manufacturing Costs 80,000 $2.70 Cost of Good Available for Sale Deduct Ending Inventory 20,000 $7.60 $0 $240,000.00 $ 120,000.00 $32,000.00 $392,000.00 $216,000.00 $608,000.00 $ 152,000.00 $750,000.00