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on a variable costing system The firm has just adopted variable costing for its internal reporting HUBER CORPORATION Income Statement Sales Less variable cost of goods sold Contribution margin Less fixed manufacturing costs at budget Gross margin Less fixed selling and administrative costs Net income before taxes 1 2 For the Month of November in thousands The controller attached the following notes with the statements 3 4 Variable costs Fixed costs applied Total cost 5 6 The unit sales price for November averaged 24 The unit manufacturing costs for the month were as follows 2 400 1 200 1 200 600 12 4 16 Sales in units 600 400 200 The unit rate for fixed manufacturing costs is a predetermined rate based on a monthly production of 150 000 units The variable costs per unit have been stable all year Production for November was 45 000 units in excess of sales The inventory at November 30 was 80 000 units Less a The vice president for sales is not comfortable with the variable costing system and wonders what the net income would have been under the previous absorption costing system 1 Present the November income statement on an absorption costing basis HUBER CORPORATION Absorption Costing Income Statement For the Month Ended November 30 2020 v Cost of Goods Sold Variable costing net income FMOH deferred in ending inventory 2400 2 Reconcile and explain the difference between the variable costing and absorption costing net income figures 1241 38

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