Reference no: EM132585643

Wu Equipment Company manufactures and distributes industrial air compressors. The following data are available for the year ended December 31, 2020. The company had no beginning inventory. In 2020, it produced 1,490 units but sold only 1,200 units. The unit selling price was $4,520.

Costs and expenses were as follows:

Variable costs per unit

Direct materials: $700

Direct labour 1,470

Variable manufacturing overhead 210

Variable selling and administrative expenses 70

Annual fixed costs and expenses:

Fixed manufacturing overhead $1,197,900

Selling and administrative expenses 105,500

Question 1: create a 2020 income statement for Wu Company using variable costing.