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

Selling price	$	92
Units in beginning inventory		300
Units produced		5,900
Units sold		6,000
Units in ending inventory		200
Variable costs per unit:
Direct materials	$	39
Direct labor	$	19
Variable manufacturing overhead	$	2
Variable selling and administrative	$	11
Fixed costs:
Fixed manufacturing overhead	$	88,500
Fixed selling and administrative	$	36,000

The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month.

a.

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

Unit product cost under variable costing:
Direct materials
Direct labor
Variable manufacturing overhead
Variable costing unit product cost

Nelson Corporation
Variable Costing Income Statement
Variable expenses:
Fixed expenses:

b.

Prepare an income statement for the month using absorption costing.

Unit product cost under absorption costing:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead cost
Absorption costing unit product cost

Nelson Corporation
Absorption Costing Income Statement
	Total