Fresh Air Products manufactures and sells a variety of camping products. Recently the company opened a new plant to manufacture a deluxe portable cooking unit. Cost and sales data for the first month of operations are shown below:

Beginning inventory		0	units
Units produced		10,000
Units sold		9,000
Manufacturing costs
Fixed overhead		$80,000
Variable overhead		$3	per unit
Direct labour		$9	per unit
Direct material		$25	per unit
Selling and administrative costs
Fixed		$190,000
Variable		$3	per unit sold

The portable cooking unit sells for $110. Management is interested in the opening months results and has asked for an income statement. Assuming the company uses absorption costing:

(a)

Your answer has been saved. See score details after the due date.

Calculate the manufacturing cost per unit.

Manufacturing cost

$enter the manufacturing cost per unit

per unit

Attempts: 1 of 1 used

(b)

Prepare an absorption-costing income statement for the first month of operation.

Fresh Air Products Income Statement-Absorption Costing For the first month of operations
select an income statement item Contribution marginVariable costsFixed costsCost of goods soldGross marginSalesOperating income before tax				$enter a dollar amount
select an opening section name Fixed costsGross marginCost of goods soldVariable costsOperating income before taxSalesContribution margin:
select an income statement item Costs of goods manufacturedEnding inventoryVolume varianceBeginning inventoryGoods available for saleSelling and administrative expensesCost of goods sold		$enter a dollar amount
select between addition and deduction AddLess: select an income statement item Costs of goods manufacturedCost of goods soldBeginning inventorySelling and administrative expensesVolume varianceGoods available for saleEnding inventory		enter a dollar amount
select a summarizing line Cost of goods soldCosts of goods manufacturedVolume varianceEnding inventorySelling and administrative expensesGoods available for saleBeginning inventory		enter a subtotal of the two previous amounts
select between addition and deduction AddLess: select an income statement item Volume varianceCost of goods soldBeginning inventoryEnding inventoryGoods available for saleCosts of goods manufacturedSelling and administrative expenses		enter a dollar amount		enter a subtotal of the two previous amounts
select a summarizing line for the first part Gross marginFixed costsOperating income before taxCost of goods soldContribution marginVariable costsSales				enter a total amount for the first part
select between addition and deduction AddLess: select an income statement item Ending inventoryCost of goods soldCosts of goods manufacturedSelling and administrative expensesGoods available for saleBeginning inventoryVolume variance				enter a dollar amount
select a summarizing line for the second part Gross marginOperating income before taxFixed costsCost of goods soldVariable costsSalesContribution margin				$enter a total amount for the second part