Whitman Company Income Statement Sales (42,eee units x $43.60 per unit) $1,831,20e Cost of goods sold (42,000 units $22 per unit) Gross margin Selling and administrative expenses 924,e00 907,200 441,000 Net operating income 466,200 The company's selling and administrative expenses consist of $315,000 per year in fixed expenses and $3 per unit sold in varlable expenses. The $22 unit product cost glven above Is computed as follows: $ 11 Direct materials Direct labor ariable manufacturing overhead Fixed manufacturing overhead ($284,eee 51,000 units) 4 22 Absorption costing unit product cost Required: 1. Redo the company's Income statement in the contribution format using varlable costing. 2. Reconclle any difference between the net operating income on your variable costing income statement and the net operating Income on the absorption costing income statement above. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Redo the company's income statement in the contribution format using variable costing. Whitman Company Variable Costing Income Statement n Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (42,eee units x $43.60 per unit) Cost of goods sold (42,00e units x $22 per unit) Gross margin Selling and administrative expenses $1,831,200 924,eee 907,200 441,eee Net operating income 466,200 The company's selling and administrative expenses consist of $315,000 per year in fixed expenses and $3 per unit sold in variable expenses. The $22 unlt product cost given above is computed as follows: $ 11 Direct materials Direct labor 5 Variable manufacturing overhead Fixed manufacturing overhead ($204,eee 51,eee units) 4 $ 22 Absorption costing unit product cost Required: 1. Redo the company's Income statement In the contributlon format using varlable costing. 2. Reconcile any difference between the net operating Income on your varlable costing Income statement and the net operating Income on the absorption costlng income statement above. Complete this question by entering your answers in the tabs below. Required 2 Required 1 Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Variable costing net operating income Absorption costing net operating income Required 1 Required 2
