Variable Costing Income Statement

Cost of Goods Sold

The cost of producing or acquiring the products that were sold during a specific period

Fixed Manufacturing Costs

The costs that do not change with the level of production, such as rent and salaries

Fixed Selling and Administrative Expenses

The costs that do not change with the level of sales, such as salaries and advertising

Gross Profit

The difference between sales and the cost of goods sold

Selling and Administrative Expenses

The expenses incurred in the process of selling products or services and managing the company

Operating Income

The profit generated from a company's normal business operations

Absorption Costing

A costing method that includes both variable and fixed manufacturing costs in the cost of goods sold

Variable Costing

A costing method that only includes variable manufacturing costs in the cost of goods sold

Income Statement

A financial statement that shows a company's revenues, expenses, and net income

Sales

The total amount of money generated from selling products or services

Cost of Goods Manufactured

The total cost of producing the goods that are available for sale during a specific period

Inventory

The value of goods held by a company for future sale