Information for Fresh Air Products is given in D8-12.

Instructions
(a) Assuming the company uses variable costing:
1. Calculate the manufacturing cost per unit.
2. Prepare a variable-costing income statement for the first month of operation.
(b) Reconcile the difference in net income between the absorption-costing and variable-costing methods.

Transcribed Image Text:

Beginning inventory Units produced Units sold Manufacturing Costs 0 units 12,000 10,000 Fixed overhead Variable overhead Direct labour Direct material $108,000 $3 per unit $12 per unit $30 per unit Selling and administrative costs ixe $200,000 Variable $4 per unit sold