Selling price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expense Fixed selling and administrative expense Beginning inventory Units produced Units sold Ending inventory Direct materials, direct labor, and variable mfg. overhead Fixed mfg. overhead Unit product cost Per Aircraft Per Month $100,000 $19,000 $5,000 $1,000 $70,000 $10,000 $20,000 January February March 0 0 2 0 Absorption Costing Variable Costing Variable Costing Contribution Format Income Statement Sales Less variable expenses: Total variable expenses Contribution margin Less fixed expenses: Net operating income Variable Costing Absorption Costing Income Statement Sales Cost of goods sold Gross margin Less selling & administrative expenses: Net operating income Absorption Costing