A variable costing income statement is one in which all variable expenses are deducted from revenue to arrive at a separately-stated contribution margin, from which all fixed expenses are then subtracted to arrive at the net profit or loss for the period. It is useful to create an income statement in the variable .Variable costing is a method in which the fixed manufacturing overheads are not allocated to units produced but the whole amount is charged against revenue in the period in which they are incurred. Under variable costing also called marginal costing , cost of inventories under .Variable cost: $8 per Kg; Fixed manufacturing overhead cost: $320,000 per year. Marketing and administrative expenses: Variable expenses: $2 per Kg of sale; Fixed expenses: $300,000 per year. Required: Income statement using absorption and variable costing methods. Explanation of the cause of difference in net .
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