Absorption Costing vs. Variable Costing: A Report

785 Words Jan 15th, 2018 3 Pages
bsorption Costing Versus Variable Costing 5 bsorption Costing Versus Variable Costing
Absorption Method q1 q2 Year Year
Period End
Mar 31,'12
Jun 30,'12
2012
2011
Production Budget
25,000
50,000
125,000
100,000
Sales
2,500,000
2,500,000
10,000,000
10,000,000
Cost of Goods Sold
1,625,000
1,625,000
6,500,000
6,500,000
Gross Profit
875,000
875,000
3,500,000
3,500,000
Selling & Admin Exp
500,000
500,000
2,000,000
2,000,000
Net Income
375,000
375,000
1,500,000
1,500,000
Cost of Goods Sold
Beg Inventory
650,000
650,000
650,000
650,000
Product Cost
1,625,000
3,250,000
8,125,000
6,500,000
Total
2,275,000
3,900,000
8,775,000
7,150,000
End Inventory
650,000
2,275,000
2,275,000
650,000
Cost of Goods Sold
1,625,000
1,625,000
6,500,000
6,500,000
Prod cost per unit
65
65
Variable Method q1 q2 Year Year
Period End
Mar 31, '12
Jun 30, '12
2012
2011
Production Budget
25,000
50,000
125,000
100,000
Sales
2,500,000
2,500,000
10,000,000
10,000,000
Var Cost of Goods Sold
1,125,000
625,000
2,375,000
2,875,000
Var Sell & Admin Exp
500,000
500,000
2,000,000
2,000,000
Contribution Margin
875,000
1,375,000
5,625,000
5,125,000
Fixed Costs
500,000
500,000
2,000,000
2,000,000
Net Income
375,000
875,000
3,625,000
3,125,000
Var Cost of Goods Sold
Beg Inventory
650,000
650,000
650,000
650,000
Var Mfg Costs
1,125,000
2,250,000
4,000,000
4,500,000
Goods Available
1,775,000…
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