Income statement under variable costing methodBeginning inventoryUnits produced45,000Units sold40,000$ 81Selling price per unitSelling and administrative expenses:$ 2$ 561,000Variable per unitFixed (per month)Manufacturing costs:Direct materials cost per unit$ 15$ 9Direct labor cost per unitVariable manufacturing overhead cost per unit $ 2Fixed manufacturing overhead cost (per month) $ 720,000

in variable costing method, product costs are only made up of variable expenses like direct…

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Business

Accounting

Income statement under variable costing method

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Income statement under variable costing method
Beginning inventory
Units produced
45,000
Units sold
40,000
$ 81
Selling price per unit
Selling and administrative expenses:
$ 2
$ 561,000
Variable per unit
Fixed (per month)
Manufacturing costs:
Direct materials cost per unit
$ 15
$ 9
Direct labor cost per unit
Variable manufacturing overhead cost per unit $ 2
Fixed manufacturing overhead cost (per month) $ 720,000

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