How is a variable costing income statement different from a 'traditional' one?

Question

I know that when using GAAP you subtract COGS from Revenue to get Gross Profit. Then you subtract non-manufacturing costs, such as selling and administration, in order to get NET PROFIT (before taxes). I'm unclear as to how a variable costing income statement differs from this one. I would appreciate any help. Thanks in advance

Answer 1

I don't think the costing method changes the format of anything. However if this is a manufacturing co., you shd have a Cost of goods manufactured statement which non-mfg companies don't have. Your cost of gds mfd statement will end with cost of goods mfd. This amt goes into the income statement to enable you to calculate cost of goods sold. Once you can arrive at the COGS, you proceed as per normal to arrive at the gross profit and after this, the income statement is standard.

Click on the link for a depiction of how the statement of cost of gds manufactured leads you to calculate COGS