Leander Office Products Inc produces and sells small storage and organizational products for office use. During the first month of operations, the products sold well. Andrea Leander, the owner of the company, was surprised to see a loss for the month on her income statement. This statement was prepared by a local bookkeeping service recommended to her by her bank manager. The statement follows: "Consists of direct materials, direct labour, and variable manufacturing overhead Leander is discouraged over the loss shown for the month, particularly since she had planned to use the statement to encourage investors to purchase shares 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 prolit for the month. Selected cost data relating to the product and to the first month of operations follow: Selected cost data relating to the product and to the first month of operations follow: Required: 1. Complete the following: a. Compute the unit product cost under absorption costing. (Round your onswer to 2 decimal places.) b. Redo the company's income statement for the month using absorption costing. (Do not leave any empty spoces; input a 0 wherever it is required.) b. Redo the company's income statement for the month using absorption costing. (Do not leave any empty spoces; input o 0 wherever it is required.) c. Reconcile the variable and absorption costing operating income (loss) figures. (Loss omounts should be entered with o minus c. Reconcile the vartable and absorption costing operating income (loss) figures. (toss amounts should be emered with a minus sign.) 2. This part of the question is not part of your Connect assigninent 3. During the second month of operations, the company again proquced 57,600 units but sold 69,600 units. IAssurtur no change in total fixed costs) a. Prepare contribution format income statement for the month using varpble costing: Leander Office Products Inc produces and sells small storage and organizational products for office use. During the first month of operations, the products sold well. Andrea Leander, the owner of the company, was surprised to see a loss for the month on her income statement. This statement was prepared by a local bookkeeping service recommended to her by her bank manager. The statement follows: "Consists of direct materials, direct labour, and variable manufacturing overhead Leander is discouraged over the loss shown for the month, particularly since she had planned to use the statement to encourage investors to purchase shares 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 prolit for the month. Selected cost data relating to the product and to the first month of operations follow: Selected cost data relating to the product and to the first month of operations follow: Required: 1. Complete the following: a. Compute the unit product cost under absorption costing. (Round your onswer to 2 decimal places.) b. Redo the company's income statement for the month using absorption costing. (Do not leave any empty spoces; input a 0 wherever it is required.) b. Redo the company's income statement for the month using absorption costing. (Do not leave any empty spoces; input o 0 wherever it is required.) c. Reconcile the variable and absorption costing operating income (loss) figures. (Loss omounts should be entered with o minus c. Reconcile the vartable and absorption costing operating income (loss) figures. (toss amounts should be emered with a minus sign.) 2. This part of the question is not part of your Connect assigninent 3. During the second month of operations, the company again proquced 57,600 units but sold 69,600 units. IAssurtur no change in total fixed costs) a. Prepare contribution format income statement for the month using varpble costing
