Variable costing: Variable costing is one of the methods of calculation of product costs. Under this method, only the variable manufacturing costs are considered as part of the product cost. Under this method, the income statement calculates contribution margin and net operating income. Absorption costing: Absorption costing is one of the methods of calculation of product costs. Under this method, the fixed manufacturing overheads are also considered as part of the product cost. Under this method, the income statement calculates Gross margin and net operating income. 1. To determine: The gross profit and operating income for March using absorption costing

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Chapter 21, Problem E21A.46E

To determine

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Variable costing: Variable costing is one of the methods of calculation of product costs. Under this method, only the variable manufacturing costs are considered as part of the product cost. Under this method, the income statement calculates contribution margin and net operating income.

Absorption costing: Absorption costing is one of the methods of calculation of product costs. Under this method, the fixed manufacturing overheads are also considered as part of the product cost. Under this method, the income statement calculates Gross margin and net operating income.

1. To determine: The gross profit and operating income for March using absorption costing

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