Question - On May 31, the end of the first month of operations, Trendwest Office Equipment Company prepared the following income statement, based on the variable costing concept:
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Trendwest Office Equipment Company Variable Costing Income Statement For the Month Ended May 31, 2010
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Sales
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$648,000
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Variable cost of goods sold:
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Variable cost of goods manufactured
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$311,040
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Less inventory, May 31 (2,400 units)
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51,840
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Variable cost of goods sold
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259,200
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Manufacturing margin
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$388,800
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Variable selling and administrative expenses
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168,000
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Contribution margin
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$220,800
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Fixed costs:
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Fixed manufacturing costs
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$64,800
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Fixed selling and administrative expenses
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51,840
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116,640
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Income form operations
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$104,160
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Required - Prepare an income statement under absorption costing. Enter all amounts as positive numbers.