Absorption costing versus direct costing}

Haille Corporation has determined the following selling price and manufacturing cost per unit based on normal production of 72,000 units per year: \(\square\)

{Required:}
Prepare comparative income statements for each month under each of the following:
1. Absorption costing (include under-or overapplied overhead).
2. Variable costing.

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Selling price per unit Variable cost per unit: Direct materials Direct labor....... Variable factory overhead Variable cost per unit Fixed cost per unit: Fixed factory overhead per year .......... Fixed selling and administrative exp. per year Normal unit production per year.. Month $22 $ 4 4 2 $10 $324,000 48,000 72,000 Units Units Produced Sold October 6,000 3,000 November 1,000 4,000 December 8,000 6,000 October has no beginning inventories.