Absorption Costing Unit Cost

Direct Materials
Direct Labor
Variable Manufacturing Overhead
Fixed Manufacturing Overhead
Absorption Costing Unit Product Cost

Variable Costing Unit Cost

Direct Materials
Direct Labor
Variable Manufacturing Overhead
Variable Costing Unit Product Cost
ting Unit Cost
100
320
40
240
700

ing Unit Cost

100
320
40
460
Ending Inventory 25
Per unit Fixed manufacturing
Overhead 240
Overhead Costs 6000

Variable Costing Income Statement

Sales 191250
Variable Expenses
Variable Cost of Goods Sold 103500
Variable Selling and
Administrative Expenses 4500
Contribution Margin 83250
Fixed Expenses
Fixed Manufacturing Overhead 60000
Fixed Selling and Administrative
Expenses 20000
Net Operating Income 3250
Beginning Inventories
Ending Inventories
Change in Inventories

Fixed manufacturing overhead in beginning Inventories

Fixed manufacturing overhead in Ending Inventories
Fixed Manufacturing Overhead Deffered in/ (Released
from) Inventories

Variable Costing Net Operating Income

Add (Deduct) fixed manufacturing Overhead cost
defferred in (relaeased from) inventory under
absorption costing
Absorption Costing Net Operating Income
Year 1 Year 2 Year 3
200 170 180
170 180 220
-30 10 40

112000 95200 100800

95200 100800 123200
-16800 5600 22400

1080400 1032400 996400

-16800 5600 22400

1063600 1038000 1018800

 Absorption Costing Unit Cost
Direct Materials
Direct Labor
Variable Manufacturing Overhead
Fixed Manufacturing Overhead

Absorption Costing Unit Product Cost

Absorption Costing Income Statement

Sales
Cost of Goods Sold
Gross Margin
Selling and Administrative Expenses
Variable Selling and Administrative
Expense
Fixed Selling and Administrative
Expense
Net Operating Income

Variable Costing Unit Cost

Direct Materials
Direct Labor
Variable Manufacturing Overhead
Variable Costing Unit Product Cost

Variable Costing Income Statement

Sales
Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative
Expenses
Contribution Margin
Fixed Expenses
Fixed Manufacturing Overhead
Fixed Selling and Administrative
Expenses
Net Operating Income

Reconciliation
Variable Costing Net Operating Income
Add deferred Ending Inventory
Absorption Costing Net Income
n Costing Unit Cost
6
9
3
12
30

ting Income Statement

1000000
600000
400000

80000

190000
130000

Costing Unit Cost

6
9
3
18

ng Income Statement
1000000

360000
80000
560000
 300000
190000
70000

onciliation
70000
60000
130000
 Variable Costing Unit Cost
Direct Materials 5
Direct Labor 6
1
Variable Manufacturing Overhead
12
Variable Costing Unit Product Cost

VARIABLE COSTING INCOME STATEMENT

Sales 875000
Variable Expenses
Variable Cost of Goods Sold 420000
Variable Selling and 70000
Adminstrative Expenses
Contribution Margin 385000
Fixed Expenses
Fixed Manufacturing Overhead 160000
Fixed Selling and Administrative 210000
Expenses
Net Operating Income 15000

Ending Inventory 5000

Manufacturing Overhead Deffered 20000

in (Released From) Inventory)

Reconciliation
Variable Costing Net Operating 15000
Income
Add (Deduct) fixed manufacturing 20000
Overhead cost defferred in
(relaeased from) inventory under
absorption costing
Absorption Costing Net Operating 35000
Income
 Variable Costing Unit Cost
Direct Materials
Direct Labor
Variable Manufacturing Overhead
Variable Costing Unit Product Cost

Variable Costing Income Statement

Sales
Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative
Expenses
Contribution Margin
Fixed Expenses
Fixed Manufacturing Overhead
Fixed Selling and Administrative
Expenses
Net Operating Income
 Absorption Costing Unit Cost
Direct Materials
Direct Labor
Variable Manufacturing Overhead
Fixed Manufacturing Overhead
Absorption Costion Unit Product Cost

Absorption Costing Income Statement

Sales
Cost of Goods Sold
Gross Margin
Selling and Administrative Expenses
Net operating Income
n Costing Unit Cost

sting Income Statement

Selling Price Per Unit 58
Variable Cost Per Unit 38
Contribution Margin Per Unit 20

BEP in Units 60000

Variable Costing Unit Cost

Year 1
Direct Materials 20
Direct Labor 12
Variable Manufacturing Overhead 4
Variable Costing Unit Product Cost 36

Variable Costing Income Statement

Year 1
Sales 3480000
Variable Expenses
Variable Cost of Goods Sold 2160000
Variable Selling and Administrative
Expenses 120000
Contribution Margin 1200000
Fixed Expenses
Fixed Manufacturing Overhead 960000
Fixed Selling and Administrative
Expenses 240000
Total Fixed Expenses 1200000
Net Operating Income 0

Absorption Costing Unit Cost

Year 1
Direct Materials 20
Direct Labor 12
Variable Manufacturing Overhead 4
Fixed Manufacturing Overhead 16
Absorption Costion Unit Product Cost 52

Absorption Costing Income Statement

Year 1
Sales 3480000
Cost of Goods Sold 3120000
Gross Margin 360000
Selling and Administrative Expenses 360000
Net Operating Income 0

Units Sold 60000

BEP in Units 60000
Units Above (Below) Break Even Point 0

Variable Costing Net Operating

Income/ (loss) 0

Absorption Costing Net Operating

Income/ (loss) 0
ng Unit Cost
Year 2 Year 3
20 20
12 12
4 4
36 36

ncome Statement
Year 2 Year 3
2900000 3770000

1800000 2340000
100000 130000
1000000 1300000

960000 960000
240000 240000
1200000 1200000
-200000 100000

ting Unit Cost

Year 2 Year 3
20 20
12 12
 4 4
12.8 24
48.8 60

Income Statement
Year 2 Year 3
2900000 3770000
2440000 3620000
460000 150000
340000 370000
120000 -220000

50000 65000
60000 60000
-10000 5000

-200000 100000

120000 -220000