Leander is discouraged over the loss shown for the month, particularly since she had planned to use the statement to encourage investors to purchase stock in the new company. A friend who is an accountant insists that the company should be using absorption costing rather than variable costing. He argues that if absorption costing had been used, the company would probably have reported a profit for the month. Selected cost data relating to the product and to the first month of operations follow: 61,650 51,200 Units produced Units sold Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative expenses $ $ $ $ 1.36 0.90 0.24 1.01 Leander is discouraged over the loss shown for the month, particularly since she had planned to use the statement to encourage investors to purchase stock in the new company. A friend who is an accountant insists that the company should be using absorption costing rather than variable costing. He argues that if absorption costing had been used, the company would probably have reported a profit for the month. Selected cost data relating to the product and to the first month of operations follow: 61,650 51,200 Units produced Units sold Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative expenses $ $ $ $ 1.36 0.90 0.24 1.01 1. Complete the following: a. Compute the unit product cost under absorption costing. (Round your answer to 2 decimal places.) Unit product cost b. Redo the company's income statement for the month using absorption costing. (Do not leave any empty spaces; input a 0 wherever it is required.) Sales Cost of goods sold: :X: This is a numeric cell, so please enter numbers only. 0 0 0 c. Reconcile the variable and absorption costing operating income (loss) figures. (Loss amounts should be entered with a minus sign.) Variable costing operating income (loss) Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Absorption costing operating income (loss) $ 0 3. During the second month of operations, the company again produced 61,650 units but sold 72,100 units. (Assume no change in total fixed costs.) a. Prepare a contribution format income statement for the month using variable costing. Variable expenses: 0 0 Fixed expenses: 0 0 b. Prepare an income statement for the month using absorption costing. (Do not leave any empty spaces; input a O wherever it is required.) Cost of goods sold: 0 0 0 $ 0 c. Reconcile the variable costing and absorption costing operating income figures. Variable costing operating income (loss) Deduct: Fixed manufacturing overhead cost released from inventory under absorption costing Absorption costing operating income (loss) $ 0 Leander is discouraged over the loss shown for the month, particularly since she had planned to use the statement to encourage investors to purchase stock in the new company. A friend who is an accountant insists that the company should be using absorption costing rather than variable costing. He argues that if absorption costing had been used, the company would probably have reported a profit for the month. Selected cost data relating to the product and to the first month of operations follow: 61,650 51,200 Units produced Units sold Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative expenses $ $ $ $ 1.36 0.90 0.24 1.01 Leander is discouraged over the loss shown for the month, particularly since she had planned to use the statement to encourage investors to purchase stock in the new company. A friend who is an accountant insists that the company should be using absorption costing rather than variable costing. He argues that if absorption costing had been used, the company would probably have reported a profit for the month. Selected cost data relating to the product and to the first month of operations follow: 61,650 51,200 Units produced Units sold Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative expenses $ $ $ $ 1.36 0.90 0.24 1.01 1. Complete the following: a. Compute the unit product cost under absorption costing. (Round your answer to 2 decimal places.) Unit product cost b. Redo the company's income statement for the month using absorption costing. (Do not leave any empty spaces; input a 0 wherever it is required.) Sales Cost of goods sold: :X: This is a numeric cell, so please enter numbers only. 0 0 0 c. Reconcile the variable and absorption costing operating income (loss) figures. (Loss amounts should be entered with a minus sign.) Variable costing operating income (loss) Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Absorption costing operating income (loss) $ 0 3. During the second month of operations, the company again produced 61,650 units but sold 72,100 units. (Assume no change in total fixed costs.) a. Prepare a contribution format income statement for the month using variable costing. Variable expenses: 0 0 Fixed expenses: 0 0 b. Prepare an income statement for the month using absorption costing. (Do not leave any empty spaces; input a O wherever it is required.) Cost of goods sold: 0 0 0 $ 0 c. Reconcile the variable costing and absorption costing operating income figures. Variable costing operating income (loss) Deduct: Fixed manufacturing overhead cost released from inventory under absorption costing Absorption costing operating income (loss) $ 0