Variable Costing Income Statement On July 31, the end of the first month of operations, Rhys Company prepared the following income statement, based on the absorption costing concept: Sales (24,000 units) $1,224,000 Cost of goods sold: Cost of goods manufactured $971,500 Less ending inventory (5,000 units) 167,500 Cost of goods sold 804,000 Gross profit $420,000 Selling and administrative expenses 136,000 Income from operations $284,000 a. Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $87,000 and the variable selling and administrative expenses were $62,000. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar. Rhys Company Income Statement-Variable Costing For the Month Ended July 31 $ Variable cost of goods sold: $ $ $ Fixed costs: $ Income from operations $ b. Reconcile the absorption costing income from operations of $284,000 with the variable costing income from operations determined in (a). Reconciliation of Absorption and Variable Costing Income Absorption costing income from operations $ Variable costing income from operations Difference $ Check My Work PreviousNext