Exercise Algo Variable Costing Income Statement; Explanation of Difference in Net Operating Income LO
Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $ Selected data for the companys operations last year follow:
Units in beginning inventory
Units produced
Units sold
Units in ending inventory
Variable costs per unit:
Direct materials $
Direct labor $
Variable manufacturing overhead $
Variable selling and administrative $
Fixed costs:
Fixed manufacturing overhead $
Fixed selling and administrative $
The absorption costing income statement prepared by the companys accountant for last year appears below:
Sales $
Cost of goods sold
Gross margin
Selling and administrative expense
Net operating income $
Required:
Prepare an income statement for last year using variable costing.
