Dance Creations manufactures authentic Hawaiian hula skirts that are purchased for traditional Hawaiian celebrations, costume parties, and other functions. During its first year of business, the company incurred the following costs: Variable Cost per Hula Skirt Direct materials $10.15 Direct labor 3.95 Variable manufacturing overhead Variable selling and administrative expenses 1.10 0.40 Fixed Cost per Month Fixed manufacturing overhead Fixed selling and administrative expenses $18,785 5,500 Dance Creations charges $33 for each skirt that it sells. During the first month of operation, it made 1,700 skirts and sold 1,580 Required: 1. Assuming Dance Creations uses variable costing, calculate the variable manufacturing cost per unit for last month 2. Complete a variable costing income statement for the last month. 3. Assuming Dance Creations uses full absorption costing, calculate the full manufacturing cost per unit for the last month. 4. Complete a full absorption costing income statement 6. Suppose next month Dance Creations expects to produce 1,700 hula skirts and sell 1,800. Without recreating the new income statements, calculate the difference in profit between variable costing and full absorption costing. Which would be higher? Complete this question by entering your answers in the tabs below. Required 2 Required 4 Required 1 Required 3 Required 6 Assuming Dance Creations uses variable costing, calculate the variable manufacturing cost per unit for last month. (Round your answer to 2 decimal places.) Total Variable Manufacturing Cost/Unit Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 6 Complete a variable costing income statement for last month. Dance Creations Contribution Margin Income Statement For the Last Month Contribution margin Net Operating Income Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 6 Assuming Dance Creations uses full absorption costing, calculate the full manufacturing cost per unit for the last month. (Round your intermediate calculations and final answer to 2 decimal places.) Total Absorption Cost/Unit Complete this question by entering your answers in the tabs below. Required 2 Required 4 Required 1 Required 3 Required 6 Complete a full absorption costing income statement. (Round your intermediate calculations to 2 decimal places.) Dance Creations Full Absorption Income Statement For Last Month Gross Margin Net Operating Income Complete this question by entering your answers in the tabs below. Required 6 Required 3 Required 4 Required 1 Required 2 Suppose next month Dance Creations expects to produce 1,700 hula skirts and sell 1,800. Without recreating the new income statements, calculate the difference in profit between variable costing and full absorption costing. Which would be higher? Difference in profit Which would be higher
