GIVEN:

Sales @10 per unit

Less: COGS
FGI-Beginning
COGM (4X1000)+2000
FGI- Ending
COGS
Gross margin
Less: SAE
Net income
Sales @10 per unit
Less: Variable COGS
FGI-Beginning
COGM (4X1000)
FGI- Ending
COGS
Product contribution margin
Less: Variable SAE
Contribution margin
Less: Fixed overhead
Fixed SAE
Net income
Difference

(2010)P=1000; S=1,000 (2011)P=1000; S=800

DM=1; DL=2;
VOH=1; FOH=2,000 or 2/u;
ABSORPTION COSTING
2010
2011
10,000.00
8,000.00

6,000.00
(6,000.00)
4,000.00
(1,500.00)
2,500.00

6,000.00
(1,200.00)
(4,800.00)
3,200.00
(1,300.00)
1,900.00

VARIABLE COSTING
10,000.00
8,000.00

4,000.00
(4,000.00)
6,000.00
(1,000.00)
5,000.00
(2,000.00)
(500.00)
2,500.00
-

4,000.00
(800.00)
(3,200.00)
4,800.00
(800.00)
4,000.00
(2,000.00)
(500.00)
1,500.00
400.00

VSAE=1;

FSAE=500

00 or 2/u;
ING

(2012) P=1000; S=1200

VSAE=1;
FSAE=500
2012
12,000.00

TOTAL
30,000.00

1,200.00
6,000.00

18,000.00

(7,200.00)
4,800.00
(1,700.00)
3,100.00

(18,000.00)
12,000.00
(4,500.00)
7,500.00

12,000.00

30,000.00

800.00
4,000.00

12,000.00

(4,800.00)
7,200.00
(1,200.00)
6,000.00
(2,000.00)
(500.00)
3,500.00

(12,000.00)
18,000.00
(3,000.00)
15,000.00
(6,000.00)
(1,500.00)
7,500.00

NG

(400.00)