Summarized data for Walrus Co. for its first year of operations are:

Sales (100,000 units)	$6,000,000
Production Costs (120,000 units):
Direct Material	1,800,000
Direct Labor	1,440,000
Manufacturing Overhead:
Variable	840,000
Fixed	300,000
Selling and Administrative Expenses:
Variable	250,000
Fixed	430,000

A. Prepare an income statement under absorption costing.

Walrus Co.
Absorption Costing Income Statement
Sales		$fill in the blank 09ad3007df85f95_2
Cost of Goods Sold:
Direct Material	$fill in the blank 09ad3007df85f95_4
Direct Labor	fill in the blank 09ad3007df85f95_6
Variable Overhead	fill in the blank 09ad3007df85f95_8
Fixed Overhead	fill in the blank 09ad3007df85f95_10
	$fill in the blank 09ad3007df85f95_11
Ending Inventory	fill in the blank 09ad3007df85f95_13
Total Cost of Goods Sold		fill in the blank 09ad3007df85f95_15
Gross Profit		$fill in the blank 09ad3007df85f95_17
Selling and Administrative Expenses		fill in the blank 09ad3007df85f95_19
Net Income		$fill in the blank 09ad3007df85f95_21

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A. Remember that absorption costing includes all costs necessary for production. Conversely, variable costing only uses the variable costs that relate directly to the production process. Keep this in mind when calculating net income under each assumption.

B. Prepare an income statement under variable costing.

Walrus Co.
Variable Costing Income Statement
Sales		$fill in the blank 96130ffbaf9bf9f_2
Variable Cost of Goods Sold:
Direct Material	$fill in the blank 96130ffbaf9bf9f_4
Direct Labor	fill in the blank 96130ffbaf9bf9f_6
Variable Overhead	fill in the blank 96130ffbaf9bf9f_8
	$fill in the blank 96130ffbaf9bf9f_9
Ending Inventory	fill in the blank 96130ffbaf9bf9f_11
Total Variable Cost of Goods Sold		fill in the blank 96130ffbaf9bf9f_13
Variable Selling Expenses		fill in the blank 96130ffbaf9bf9f_15
Contribution Margin		$fill in the blank 96130ffbaf9bf9f_17
Fixed Expenses:
Fixed Manufacturing Overhead	$fill in the blank 96130ffbaf9bf9f_19
Fixed Administrative Expenses	fill in the blank 96130ffbaf9bf9f_21	fill in the blank 96130ffbaf9bf9f_22
Net Income		$fill in the blank 96130ffbaf9bf9f_24