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Security Technology Inc. (STI) is a manufacturer of an electronic control system used in the...

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Security Technology Inc. (STI) is a manufacturer of an electronic control system used in the manufacture of certain special-duty auto transmissions used primarily for police and military applications. The part sells for $55 per unit and had sales of 24,000 units in the current year, 2018. STI has no inventory on hand at the beginning of 2018 and is projecting sales of 26,000 units in 2019. STI is planning the same production level for 2019 as in 2018, 25,000 units. The variable manufacturing costs for STI are $16, and the variable selling costs are only $0.50 per unit. The fixed manufacturing costs are $200,000 per year, and the fixed selling costs are $500 per year. Prepare an income statement for each year using variable costing.. SECURITY TECHNOLOGY INC. Variable Costing Income Statement 2018 2019 1,320,000 $ 1,430,000 Sales Less: Cost of goods sold Cost of goods produced Beginning inventory $ 400,000 400,000 0 Available for sale 400,000 Less: Ending inventory Cost of goods sold Contribution margin Less: Fixed manufacturing costs 200.000 200,000 Less: Selling and administrative costs Fixed 500 500 Operating income $ 723,500 $ 800,500

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