Question
Kurnia Company manufactures and sells a single product. During the year, the company produced 25,000 units and sold 21,000 units. The selling price of the
Kurnia Company manufactures and sells a single product. During the year, the company produced 25,000 units and sold 21,000 units. The selling price of the companys product in $ 70 per unit. The following cost were incurred during the companys first year of operations: Variable cost per unit:
Manufacturing: Direct material .. $ 12
Direct labor ... $ 18
Variable manufacturing overhead .... $ 6
Variable selling and administrative. . $ 8
Fixed cost per unit: Fixed manufacturing overhead .. $ 275,000
Fixed selling and administrative $ 200,000
Required: a. Compute unit product cost used absorption costing and prepare Income Statement under Traditional Format! Please explain the result! (10 points) b. Compute unit product cost used variable costing and prepare Income Statement under Contribution Format! Please explain the result! (10 points)
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