Question

Variable Costing Income Statement On April 30, the end of the first month of operations, Joplin Company prepared the following income statement, based on the absorption costing concept: Joplin Company Absorption Costing Income Statement For the Month Ended April 30 Sales (3,100 units) $83,700 Cost of goods sold: Cost of goods manufactured (3,500 units) $66,500 Inventory, April 30 (500 units) (9,500) Total cost of goods sold (57,000) Gross profit $26,700 Selling and administrative expenses (15,250) Operating income $11,450 If the fixed manufacturing costs were $16,625 and the fixed selling and administrative expenses were $7,470, prepare an income statement according to the variable costing concept. Round all final answers to whole dollars. Joplin Company Variable Costing Income Statement For the Month

Ended April 30 $ Variable cost of goods sold: $ $ $ Fixed costs: $ $

Answer 1

Joplin Company
Variable Costing income statement
Sales		$83,700
Less: Variable costs:
Variable cost of good sold [($66,500 (-) $16,625)* 3100/3500]	$44,175
Variable Selling and Administrative Expenses ($15,250 (-) $7,470)	$7,780
Total variable costs		($51,955)
Contribution Margin		$31,745
Less: Fixed Costs:
Fixed Manufacturing Overhead	$16,625
Fixed Selling & Administrative Expenses	$7,740
Total Fixed costs		($24,365)
Operating Income (Loss)		$7,380