Absorption Costing Income Statement

Sales (15,000 x $50) $750,000

Cost of goods sold:

Beginning inventory (5,000 x $35) $175,000

Cost of good manufactured (10,000 x $40) 400,000 575,000

Gross profit $175,000

Selling and admin. expenses 125,000

Operating income $ 50,000

Units Manufactured Are Less Than Units Sold

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