Answer:
Appliance Apps
Income statement under variable costing method.
Sales ($12 x 36,000) $432,000
Less Variable Cost of Sales ($144,000)
Contribution $288,000
Less Expenses :
Fixed Manufacturing Expenses $120,000
Fixed Selling and Administration Expenses $20,000
Variable Selling and Administration Expenses $63,000 ($203000)
Net Income $85000
Explanation:
Total Product Cost (Variable Manufacturing Cost Only)
Direct Materials per Unit $2.25
Direct Labor per Unit $1.50
Variable Manufacturing Overhead per Unit $0.25
Total $4.00
Cost of Sales = Product Cost x Units Sold
= $4.00 x 36,000
= $144,000
