The following information relates to Dorian Industrial for fiscal 2014, the companys first year of operation:

Units produced		421,000
Units sold		408,100
Selling price per unit	$	51
Direct material per unit	$	15
Direct labor per unit	$	4
Variable manufacturing overhead per unit	$	3
Variable selling cost per unit	$	0.03
Annual fixed manufacturing overhead	$	1,263,000
Annual fixed selling expense	$	317,000
Annual fixed administrative expense	$	115,000

A. Prepare an income statement using full costing. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Dorian Industrial Income Statement For the Year Ended December 31, 2014

Sales:

Less: Cost of Goods Sold

Gross Margin

Less: Variable Selling Expense

Fixed Selling Expenses

Fixed Adminstrative exepenses

Net Income:

B.Prepare an income statement using variable costing.

Sales
Less: Variable expenses:
Cost of goods sold
Selling costs
Contribution Margin
Less: Fixed expenses:
Manufacturing Overhead
Selling Cost
Administartion Cost
Net Income

C.

Calculate the amount of fixed manufacturing overhead that will be included in ending inventory
under full costing and reconcile it to the difference between income computed under variable and full costing
Fixed manufacturing overhead included in ending inventory
Net income under full costing
Net income under variable costing
Difference