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Absorption and variable costing

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Absorption and variable costing income statements for two months and analysis

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This explains the Absorption and variable costing by practical example

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Please see attached file.

(Variable Costing)

Income Statement
For the Month Ending

in$
JULY AUGUST

Sales 450000 450000
Variable expenses
Variable cost of goods sold
Inventory, January 1 0 26100
Variable manufacturing 339300 287100
costs
Cost of goods available 339300 313200
for sale
Inventory, December 31 26100 0
Variable cost of goods 313200 313200
sold
Variable selling expenses 18000 18000
Total variable expenses 331200 331200
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