Columbia Corporation produces a single product. The company's variable costing income statement for November appears below: Columbia CorporationIncome StatementFor the Month ended November 30Sales ($30 per unit)$1,200,000Variable expenses: Variable cost of goods sold 720,000Variable selling expense 160,000Total variable expenses 880,000Contribution margin 320,000Fixed expenses: Manufacturing 140,000Selling and administrative 35,000Total fixed expenses 175,000Net operating income$145,000 During November, 35,000 units were manufactured and 8,000 units were in beginning inventory. Variable production costs have remained constant on a per unit basis over the past several months. Under absorption costing, for November the company would report a: $120,000 profit $125,000 profit $125,000 loss $145,000 profit

Absorption costing is the method of costing with the inclusion of all the costs incurred in…

Answered: Columbia Corporation produces a single…

Principles of Accounting Volume 2

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Chapter3: Cost-volume-profit Analysis

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Columbia Corporation produces a single product. The company's variable costing income statement for November appears below:

Columbia Corporation
Income Statement
For the Month ended November 30
Sales ($30 per unit)	$	1,200,000
Variable expenses:
Variable cost of goods sold		720,000
Variable selling expense		160,000
Total variable expenses		880,000
Contribution margin		320,000
Fixed expenses:
Manufacturing		140,000
Selling and administrative		35,000
Total fixed expenses		175,000
Net operating income	$	145,000

During November, 35,000 units were manufactured and 8,000 units were in beginning inventory. Variable production costs have remained constant on a per unit basis over the past several months.

Under absorption costing, for November the company would report a:

		$120,000 profit
		$125,000 profit
		$125,000 loss
		$145,000 profit

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