Chapter 6, Problem 5E

Variable costing income statement

On November 30, the end of the first month of operations, Weatherford Company prepared the following income statement, based on the absorption costing concept:

Weatherford Company
Absorption Costing Income Statement
For the Month Ended November 30
Sales (104,000 units)		$5,200,000
Cost of goods sold:
Cost of goods manufactured (120,000 units)	$4,560,000
Inventory, November 30 (16,000 units)	(608,000)
Total cost of goods sold		3,952,000
Gross profit		$1,248,000
Selling and administrative expenses		400,000
Income from operations		$ 848,000

If the fixed manufacturing costs were $960,000 and the fixed selling and administrative expenses were $280,000, prepare an income statement according to the variable costing concept.