The variable manufacturing costs per unit of Champion Motors are as follows: (Click the icon to view the variabile manufacturing costs per unit) Champion Motors assembles and sells motor vehicles and uses standard costing. Actual data and variable costing and absorption costing income statements relating to April and May 2020 are as follows: (Click the icon to view the data.) (Click the icon to view the variable costing income statements.) (Click the icon to view the absorption costing income statements.) Read the requirements Requirement 1. Prepare income statements for Champion Motors in April and May 2020 under throughput costing. Begin by completing the top portion of the statement, then the bottom portion. (Complete all input fields. Enter a 'O' for any zero amounts.) April 2020 May 2020 Revenues 1 Data table A B 1 April May 2 Unit data: 3 Beginning inventory 0 50 4 Production 600 575 5 Sales 550 575 6 Variable costs: 7 $ 10,500 $ 10,500 Manufacturing cost per unit produced Operating (marketing) cost per unit sold 8 2,400 2,400 9 Fixed costs: 10 Manufacturing costs $ 2,250,000$ 2,250,000 11 Operating (marketing) costs 725,000 725,000 The selling price per vehicle is $25,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 600 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs. Variable costing income statements April 2020 May 2020 Revenues $ 13,750,000 $ 14,375,000 Variable costs: Beginning inventory $ 0 $ 525,000 6,037,500 Variable manufacturing costs 6,300,000 Cost of goods available for sale 6,300,000 (525,000) 6,562,500 (525,000) Less: Ending inventory Variable cost of goods sold 5,775,000 1,320,000 6,037,500 1,380,000 Variable operating costs Total variable costs 7,095,000 7,417,500 Contribution margin 6,655,000 6,957,500 Fixed costs: Fixed manufacturing costs 2,250,000 725,000 2,250,000 725,000 Fixed operating costs Total fixed costs 2,975,000 2,975,000 $ 3,680,000 $ 3,982,500 Operating income Absorption costing income statements April 2020 May 2020 Revenues $ 13,750,000 $ 14,375,000 $ 0 $ Cost of goods sold: Beginning inventory Variable manufacturing costs Allocated fixed manufacturing costs Cost of goods available for sale Less: Ending inventory 6,300,000 2,250,000 712,500 6,037,500 2,156,250 8,550,000 8,906,250 (712,500) (712,500) 0 93,750 U Adjustment for production-volume variance 7,837,500 8,287,500 5,912,500 6,087,500 Cost of goods sold Gross margin Operating costs: Variable operating costs 1,320,000 1,380,000 725,000 Fixed operating costs 725,000 Total operating costs 2,045,000 2,105,000 $ 3,867,500 $ 3,982,500 Operating income Requirements 1. Prepare income statements for Champion Motors in April and May 2020 under throughput costing. 2. Contrast the results in requirement 1 with the absorption and variable costing income statements presented. 3. Give one motivation for Champion Motors to adopt throughput costing
