Variable and Absorption Costing The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31 Sales Cost of goods sold Selling, administrative, and other expenses Total expenses (in millions) $28,400 $(24,140) (2,560) $(26,700) $1,700 Operating income Assume that $6,190 million of cost of goods sold and $1,410 million of selling, administrative, and other expenses were fixed costs Inventories at the beginning and end of the year were as follows Beginning inventory Ending inventory $3,370 3,940 Also, assume that 40% of the beginning and ending inventories were fixed costs a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. Caterpillar Inc. Variable Costing Income Statement (assumed) For the Year Ended December 31 Line Item Description (in millions) Amount Amount 28,400 (In millions) Line Item Description Amount Amount Sales 28,400 Vanable cost of goods sold: Beginning inventory 2,022 Variable cost of goods manufactured 18,520 Ending inventory 2,364 Total variable cost of goods sold 22.906 Manufacturing margin 5,494 Variable selling and administrative expenses 1,150 4.344 Contribution margin Fixed costs Fixed manufacturing costs 6,190 Fixed selling and administrative expenses 1,410 Total faved cost 7,600 Operating income 3,256 within sheamhne einn sad imeishia maction conne