Chapter 6, Problem 6E

Absorption costing income statement

On March 31. the end of the first month of operations, Sullivan Equipment Company prepared the following income statement, based on the variable costing Concept:

Sullivan Equipment Company
Variable Costing Income Statement
For the Month Ended March 31
Sales 264,000 units)		$66,000,000
Variable cost of goods sold
Variable cost of goods manufactured	$45,000,000
Inventory, March 31 (36,000 units)	(5,400,000)
Total variable cost of goods sold		39,600,000
Manufacturing margin		$26,400,000
Variable selling and administrative expenses		2,400,000
Contribution margin		$24,000,000
Fixed costs:
Fixed manufacturing costs	$ 7,500,000
Fixed selling and administrative expenses	375,000
Total fixed costs		7,875,000
Income from operations		$16,125,000

Prepare in income statement under absorption costing-