On november 30, the end of the first month of operations, weatherford company prepared the following income statement, based on the absorption costing concept:
weatherford company
absorption costing income statement
for the month ended november 30
sales (104,000 units) $5,200,000
cost of goods sold:
cost of goods manufactured (120,000 units) $4,560,000
inventory, november 30 (16,000 units) (608,000)
total cost of goods sold 3,952,000
gross profit $1,248,000
selling and administrative expenses 400,000
income from operations $848,000
assume the fixed manufacturing costs were $960,000 and the fixed selling and administrative expenses were $280,000.
1. prepare an income statement according to the variable costing concept.