Margin Contribution Income Statement Sales (9000 Units Essay

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Total Length: 301 words ( 1 double-spaced pages)

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Margin

Contribution Income Statement

Sales (9000 units sold)

2,700,000

Variable Expenses

Product costs (120+60=40)x9000

1,980,000

Selling and admin 10x9000

Contribution Margin (70 per unit)

Fixed Expenses

Manufacturing Overhead

Selling and administrative

Net Operating Income

The net income on the contribution income statement is $25,000 lower than the $305,000 on the absorption income statement because $25 in fixed expenses is assigned to each unit cost (Accounting for Management, 2012).

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Where 10,000 units were produced, but only 9,000 sold, that leaves 1,000 units in inventory. The additional $25,000, 25 x 1,000, is listed in the inventory account.

Contribution Margin Income Statement

Sales 9,000 units at 330

2,970,000

Variable Expenses

Production (120+60+40)x9,000

1,980,000

Selling and admin 10x9,000

90,000

2,070,000

Contribution Margin

9,000,000

Fixed Expenses

Manufacturing Overhead

250,000

Selling and admin

100,.000.....

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