Maloney Co. provided the following information for the year 20X1:Units produced and sold4,400 unitsSelling Price$400/unitDirect materials$85/unitDirect labor$55/unitFixed manufacturing overhead$130,000/yearFixed selling and administrative costs$165,000/yearVariable manufacturing overhead$40/unitThere are no beginning inventories. Prepare an income statement using the variable costing format.
What will be an ideal response?
| Maloney Co. Income Statement Year Ended December 31, 20X1 | |
| Sales | $1,760,000 |
| - Variable Costs | 792,000 |
| Contribution Margin | 968,000 |
| - Fixed Costs | 295,000 |
| Operating Income | $673,000 |
Variable costs = 4,400 units × ($85 + $55 + $40) = $792,000
Fixed costs = $130,000 + $165,000 = $295,000
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