Variable Costing Exercise PNT Company has been producing and selling pint containers for a number of years. The following information was gathered for 2016. Selling price per unit $15.50 Variable Cost per Unit Manufacturing Selling& Admin $7.50 S3.00 Fixed Costs Manufacturing Selling & Admin S220,000 S145,000 Required a. Prepare an income statement using the contribution approach for both scenarios b. Prepare an income statement using the absorption approach for both scenarios Scenario 1 PNT has produced and sold 120,000 units Scenario 2 PNT has produced 120,000 units and sold 100,000 units Scenario 3 PNT has produced 120,000 units and sold 135,000 units Scenario 1-Production Sale PNT Company Income Statement-Contribution Year Ended December 31, 2016 Sales Variable Expenses Variable Manufacturing Variable Selling & Admin Total Variable Expenses Contribution Margin Fixed Expenses Fixed Manufacturing Fixed Selling and Admin Total Fixed Expenses Net Income PNT Company Income Statement-Absorption Year Ended December 31, 2016 Sales Cost of Goods Sold Variable Manufacturing Fixed Manufacturing Total Cost of Goods Sold Gross Profit Selling &Admin Expenses Variable Selling & Admin Fixed Selling and Admin Total Selling & Admin Exp Net Income Scenario 2-Production Exceeds Sales Scenario 2-Production Exceeds Sales PNT Company Income Statement-Contribution Year Ended December 31, 2016 Sales Variable Expenses Variable Manufacturing Variable Selling & Admin Total Variable Expenses Contribution Margin Fixed Expenses Fixed Manufacturing Fixed Selling and Admin Total Fixed Expenses Net Income PNT Company Income Statement-Absorption Year Ended December 31, 2016 Sales Cost of Goods Sold Variable Manufacturing Fixed Manufacturing Total Cost of Goods Sold Gross Profit Selling & Admin Expenses Variable Selling & Admin Fixed Selling and Admin Total Selling& Admin Exp Net Income Scenario 3-Production Is Less than Sales Scenario 3-Production Is Less than Sales PNT Company Income Statement-Contribution Year Ended December 31, 2016 Sales Variable Expenses Variable Manufacturing Variable Selling & Admin Total Variable Expenses Contribution Margin Fixed Expenses Fixed Manufacturing Fixed Selling and Admin Total Fixed Expenses Net Income PNT Company Income Statement-Absorption Year Ended December 31, 2016 Sales Cost of Goods Sold Variable Manufacturing Fixed Manufacturing Total Cost of Goods Sold Gross Profit Selling & Admin Expenses Variable Selling & Admin Fixed Selling and Admin Total Selling & Admin Exp Net Income