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Absorption Costing Income Statement

On June 30, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on the variable costing concept:

Sales (100,000 units)				$1,300,000
Variable cost of goods sold:
	Variable cost of goods manufactured (120,000 units x $9 per unit)	$1,080,000
	Less ending inventory (20,000 units x $9 per unit)	180,000
	Variable cost of goods sold			900,000
Manufacturing margin				$400,000
Variable selling and administrative expenses				14,000
Contribution margin				$386,000
Fixed costs:
	Fixed manufacturing costs	$30,000
	Fixed selling and administrative expenses	26,000		56,000
Income from operations				$330,000

Question Content Area

a. Prepare an absorption costing income statement. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar.

Tudor Manufacturing Co. Income Statement-Absorption Costing For the Month Ended June 30

Cost of goods manufacturedEnding inventoryGross profitSalesSelling and administrative expenses		$- Select -
Cost of goods sold:
Cost of goods manufacturedCost of goods soldGross profitSalesSelling and administrative expenses	$- Select -
Less cost of goods soldLess ending inventoryLess gross profitLess salesless selling and administrative expenses	- Select -
Cost of goods manufacturedCost of goods soldGross profitSalesSelling and administrative expenses		- Select -
Cost of goods manufacturedCost of goods soldGross profitSalesSelling and administrative expenses		$- Select -
Cost of goods manufacturedCost of goods soldGross profitSalesSelling and administrative expenses		- Select -
Income from operations		$fill in the blank c1886204905603c_13

Question Content Area

b. Reconcile the variable costing income from operations of $330,000 with the absorption costing income from operations determined in (a).

blank Reconciliation of Variable and Absorption Costing Income blank

Variable costing income from operations	$fill in the blank fb87e80bf06dfdd_1
Absorption costing income from operations	fill in the blank fb87e80bf06dfdd_2
Difference	$fill in the blank fb87e80bf06dfdd_3

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