Required: Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements
4. ( TCO A) The following data( in thousands of dollars) have been taken from the accounting records of Karmana Corporation for the just-completed year.
Sales...............................................................$ 950
Raw materials inventory, beginning.....................$ 10
Raw materials inventory, ending.........................$ 30
Purchases of raw materials...............................$ 120
Direct labor......................................................$ 180
Manufacturing overhead...................................$ 230
Administrative expenses...................................$ 100
Selling expenses...............................................$ 140
Work-in-process inventory, beginning..................$ 50
Work-in-process inventory, ending......................$ 40
Finished goods inventory, beginning..................$ 100
Finished goods inventory, ending........................$ 80