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

4.2 Ratings (871 Votes)

	Full	Variable
	Costing	Costing
Variable manufacturing costs	18	18
Fixed manufacturing costs ($201600/25200)	8	-
Per unit manufacturing cost $	26	18

Security Technology Inc.
Full Costing Income Statement
	2018		2019
Sales		1373700		1499100
Less: Cost of goods sold
Beginning inventory	0		28600
Add cost of production	655200		655200

Available for sale	655200		683800
Less ending inventory	28600		0

Cost of goods sold		626600		683800
Gross margin		747100		815300
Less: Selling and administrative costs
Variable	16870		18410
Fixed	520		520
		17390		18930
Operating income		729710		796370

Security Technology Inc.
Variable Costing Income Statement
	2018		2019
Sales		1373700		1499100
Less: Cost of goods sold
Beginning inventory	0		19800
Add cost of production	453600		453600

Available for sale	453600		473400
Less ending inventory	19800		0

Cost of goods sold	433800		473400
Variable selling and administrative costs	16870		18410

		450670		491810
Contribution margin		923030		1007290
Fixed manufacturing costs	201600		201600

Less: Selling and administrative costs
Fixed	520		520

		202120		202120
Operating income		720910		805170

Security Technology Inc
Reconciliation
	2018	2019
Change in inventory units	1100	-1100
Multiply times fixed overhead rate	8800	-8800
Difference in operating income	8800	-8800

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