Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costa per unit:: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead $ 144,000 Fixed selling and administrative 160,000 Total fixed cost per month $ 304,000 The product sells for $55 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced 24,000 24,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Units Sold Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. $5 10 4 20,000 28,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July $1,100,000 500,000 600,000 180,000 $ 420,000 1 $ 20 2. Prepare variable costing income statements for July and August 3. Reconcile the variable costing and absorption costing net operating incomes. August $1,540,000 700,000 840,000 188,000 5 652,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Required: 1. Determine the unit product cost under. a. Absorption costing. b. Variable costing. July $ 1,100,000 500,000 600,000 180,000 $ 420,000 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes. Complete this question by entering your answers in the tabs below. a. Absorption costing b. Variable costing Required 1 Required 2 Required 3 Determine the unit product cost under: (a) Absorption costing, (b) Variable costing. Unit Product Cost Required 2 > August $ 1,540,000 700,000 840,000 188,000 $ 652,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare variable costing income statements for July and August. Denton Company Variable Costing Income Statement July Net operating income (loss) August Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Reconcile the variable costing and absorption costing net operating incomes. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes July Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead cost deferred in (released from) inventory under absorption costing Absorption costing net operating income (loss)
