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No.3 (10 Marks) Rafa Company, which has just started the business only with one product, has provided the following data concerning its first month of
No.3 (10 Marks) Rafa Company, which has just started the business only with one product, has provided the following data concerning its first month of operations: Selling price $155 Units produced Units sold 4,500 4,300 Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $38 $26 $9 $7 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $175,500 $82,900 The company plans to produce the same number of units every month, although the sales in units may vary from month to month. The company's variable costs per unit and total fixed costs will be constant from month to month in short run. Required: a. What is the unit product cost for the month under variable costing? b. Prepare an income statement for the month using the contribution format and the variable costing method. c. Without preparing an income statement, determine the absorption costing net operating income for the month. (Hint: Use the reconciliation method.)
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