Maher Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price	$	193
Units in beginning inventory		0
Units produced		3,700
Units sold		2,810
Units in ending inventory		890
Variable costs per unit:
Direct materials	$	51
Direct labor	$	54
Variable manufacturing overhead	$	11
Variable selling and administrative expense	$	20
Fixed costs:
Fixed manufacturing overhead	$	118,400
Fixed selling and administrative expense	$	8,430

Required:

a. What is the unit product cost for the month under variable costing?

b. What is the unit product cost for the month under absorption costing?

c. Prepare a contribution format income statement for the month using variable costing.

d. Prepare an income statement for the month using absorption costing.

e. Reconcile the variable costing and absorption costing net operating incomes for the month.

• Required A
• Required B
• Required C
• Required D
• Required E

What is the unit product cost for the month under variable costing?

	Cost Per Unit
Variable costing

• Required B
• Required C
• Required D
• Required E

What is the unit product cost for the month under absorption costing?

	Cost Per Unit
Absorption costing

• Required A
• Required B
• Required C
• Required D
• Required E

Prepare a contribution format income statement for the month using variable costing.

Variable Costing Income Statement
Variable expenses:
Fixed expenses:

• Required C
• Required D
• Required E

Prepare an income statement for the month using absorption costing.

Absorption Costing Income Statement
Gross margin
Selling and administrative expenses:
Net operating income

• Required A
• Required B
• Required C
• Required D
• Required E

Reconcile the variable costing and absorption costing net operating incomes for the month.

Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes
Variable costing net operating income (loss)
Absorption costing net operating income (loss)