On July 31, 2008, the end of the first month of operations, Martin Company prepared the following income statement, based on the absorption costing concept:
|
Sales (14,000 units) |
|
$616,000 |
|
Cost of goods sold: |
|
|
|
Cost of goods manufactured |
$558,750 |
|
|
Less ending inventory (1,000 units) |
37,250 |
|
|
Cost of goods sold |
|
521,500 |
|
Gross profit |
|
$ 94,500 |
|
Selling and administrative expenses |
|
58,200 |
|
Income from operations |
|
$ 36,300 |
Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $28,950 and the variable selling and administrative expenses were $32,000.