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Variable Costing Income Statement The following data were adapted from a recent income statement of Bluth Company: (in millions) Sales $289,170 Operating costs: Cost of
Variable Costing Income Statement The following data were adapted from a recent income statement of Bluth Company: (in millions) Sales $289,170 Operating costs: Cost of products sold $138,800 Marketing, administrative, and other expenses 92,530 Total operating costs $231,330 Income from operations $57,840 Assume that the variable amount of each category of operating costs is as follows: (in millions) Cost of products sold $78,080 Marketing, administrative, and other expenses 37,590 a. Based on the data given, prepare a variable costing income statement for Bluth Company, assuming that the company maintained constant inventory levels during the period.Bluth Company Variable Costing Income Statement (assumed) (in millions) Sales Variable cost of products sold Manufacturing margin Variable marketing, administrative, and other expenses V Contribution margin Fixed costs: Fixed manufacturing costs $ Fixed marketing, administrative, and other expenses Total fixed costs V Income from operations Feedback Check My Work a. Sales - variable cost of products sold = Manufacturing margin; Manufacturing margin - variable marketing, administrative, and other expenses = Contribution margin; Contribution margin - (fixed manufacturing costs + fixed marketing, administrative and other expenses) = income from operations Learning Objective 1
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