Information taken from Giles Corporation's May accounting records follows.
Required:
Direct materials used.......................................$150,000
Direct labor......................................................80,000
Variable manufacturing overhead...........................30,000
Fixed manufacturing overhead.............................100,000
Variable selling and administrative costs..................51,000
Fixed selling and administrative costs......................60,000
Sales revenue...................................................625,000
a. Assuming the use of variable costing, compute the inventorial costs for the month.
b. Compute the month's inventorial costs by using absorption costing.
c. Assume that anticipated and actual production totaled 20,000 units, and that 18,000 units were sold during May. Determine the amount of fixed manufacturing overhead and fixed selling and administrative costs that would be expensed for the month under (1) variable costing and (2) absorption costing.
d. Assume the same data as in requirement "C." Compute the contribution margin that would be reported on a variable-costing income statement.