The Dorset Corporation produces and sells a single product. The following data refer to the year just completed:

Beginning inventory

0

Units produced

9,000

Units sold

7,000

Selling price per unit

$

47

Selling and administrative expenses:

Variable per unit

$

4

Fixed per year

$

58,000

Manufacturing costs:

Direct materials cost per unit

$

10

Direct labor cost per unit

$

6

Variable manufacturing overhead cost per unit

$

5

Fixed manufacturing overhead per year

$

90,000

Assume that direct labor is a variable cost.

Required:

Prepare an income statement for the year using absorption costing and variable costing

Now, Write in Box

Gross Profit under Absorption Costing

Net Profit under Absorption Costing

Contribution Margin under Variable Costing

Net Profit under Variable Costing