Question
Nicholas Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 120 Units in
Nicholas Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
|
|
|
Selling price | $ | 120 |
Units in beginning inventory |
| 0 |
Units produced |
| 8,900 |
Units sold |
| 8,400 |
Units in ending inventory |
| 500 |
Variable costs per unit: |
|
|
Direct materials | $ | 38 |
Direct labor | $ | 36 |
Variable manufacturing overhead | $ | 6 |
Variable selling and administrative expense | $ | 9 |
Fixed costs: |
|
|
Fixed manufacturing overhead | $ | 151,300 |
Fixed selling and administrative expense | $ | 109,200 |
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.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started