Chapter 20 - Variable Costing.pptx - Variable Costing Contribution Margin Analysis Absorption Costing Income Statement Absorption Costing Income

Chapter 20 - Variable Costing.pptx - Variable Costing...

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Variable Costing & Contribution Margin Analysis
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Absorption Costing Income Statement
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Absorption Costing Income StatementSales$100,000Cost of goods sold (Variable & Fixed Costs)30,000Gross Profit$70,000Selling & Administrative expenses (Variable & Fixed Costs)45.000Operating Income$25,000
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Variable Costing Income Statement
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Variable Costing Income StatementSales$100,000Variable Costs (Variable COGS & Variable Selling and Admin)40,000Contribution margin$60,000Fixed Costs(Fixed Manufacturing Costs & Fixed Selling and Admin)35,000Operating Income$25,000
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Variable Costing Income StatementSales$100,000Variable cost of goods sold20,000Manufacturing Margin$80,000Variable Selling & Admin expenses20,000Contribution margin$60,000Fixed Manufacturing Costs10,000Fixed Selling & Admin expenses25,000Operating Income$25,000
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Variable & Fixed Manufacturing CostsVariable Manufacturing CostsFixed Manufacturing CostsDirect MaterialsFixed overheadDirect labors (wages)Factory rentVariable overheadFactory property taxIndirect materialsFactory supervisor’s salaryIndirect laborStraight-line factory depreciationFactory supplies, factory utilitiesFactory insurance
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