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