Absorption and Variable Costing Comparisons Peachtree Company manufactures peach jam. Because of bad weather, its peach crop was small. The following data have been gathered for the summer quarter of 2009: Beginning inventory (cases) 0 Cases produced 10,000 Cases sold 9,000 Sales price per case $60 Direct materials per case $7 Direct labor per case $9 Variable manufacturing overhead per case $3 Total fixed manufacturing overhead $400,000 Variable selling and administrative cost per case $2 Fixed selling and administrative cost $48,000 (a) Prepare a functional income statement for the quarter using absorption costing. (Do not use negative signs with your answers, EXCEPT if you calculate a net loss.) Sales $Answer Cost of goods sold: Variable costs $Answer Fixed costs Answer Goods available Answer Ending inventory Answer Answer Gross profit Answer Operating expenses: Variable selling and administrative $Answer Fixed selling and administrative Answer Answer Net income (loss) $Answer (b) Prepare a contribution income statement for the quarter using variable costing. (Do not use negative signs with your answers, EXCEPT if you calculate a net loss.) Sales $Answer Variable expenses: Manufacturing $Answer Selling and administrative Answer Answer Contribution margin Answer Fixed expenses: Manufacturing overhead $Answer Selling and administrative Answer Answer Net income (loss) $Answer (c) What is the value of ending inventory under absorption costing? $Answer (d) What is the value of ending inventory under variable costing? $Answer