Question
A manufacturing company has provided the following data concerning its most recent month of operations: Selling price. $12.00 Units in beginning inventory 0 Units produced.
A manufacturing company has provided the following data concerning its most recent month of operations: Selling price. $12.00 Units in beginning inventory 0 Units produced. 70,000 Units sold. 60,000 Units in ending inventory 10,000 Variable costs per unit: Direct materials $2.00 Direct labor.. 1.00 Variable manufacturing overhead 1.00 Variable selling and administrative. 1.50 Fixed costs: Fixed manufacturing overhead. $140,000 Fixed selling and administrative.. 150,000
Required: (a) Calculate the unit product cost under absorption costing.
(b) Calculate the unit product cost under variable costing.
(c) Prepare an income statement for the month using absorption costing.
(d) Prepare a contribution format income statement for the month using variable costing.
(e) Reconcile the variable costing and absorption costing net operating incomes for the month.
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