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Required information [The following information applies to the questions displayed below.] Oak Mart, a producer of solid oak tables, reports the following data from its second year of business. Sales price per unit 320 per unit Units produced this year Units sold this year 110,000 units 113,500 units 3,500 units Units in beginning-year inventory Beginning inventory costs Variable (3,500 units x $135) Fixed (3,500 units x $80) Total Manufacturing costs this year Direct materials Direct labor Overhead costs this year Variable overhead Fixed overhead Selling and administrative costs this year Variable Fixed $472,500 280,000 $752,500 $3,400,000 $7,600,000 $1,350,000 4,400,000 42 per unit 68 per unit 2. Prepare the current-year income statement for the company using absorption costing. OAK MART COMPANY Absorption Costing Income Statement Sales Less: Cost of goods sold $ Beginning inventory Manufacturing costs this year Less: Ending inventory Direct materials Direct labor Variable overhead costs Fixed overhead costs Cost of goods sold Gross margin Selling general and administrative expenses Variable selling and administrative expenses Fixed selling and administrative costs Total selling general and administrative expenses Net income (loss) Net income under variable costing is higher than net income under absorption costing by Number of units added to(subtracted from) inventory Fixed costs added to(subtracted from) inventory 752,500 4,620,000 7,480,000 3,400,000 7,600,000 1,350,000 4,400,000 $ $ $ $ 36,320,000 23,852,500 12,467,500 5,750,000 6,717,500 3,500 80 280,000

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