P7-6 a preparation and reconcile variable costing statements

Denton Company manufactures and sells a single product. Cost data for the product are given below:

Variable costs per unit: Direct materials $7 Direct labour 10 Variable manufacturing overhead 5 Variable selling and administrative 3 Total variable cost per unit E 25 Fixed costs per month: Fixed manufacturing overhead E 315,000 Fixed selling and administrative 245,000 Total fixed cost per month E 560,000July August Revenue E 900,000 $ 1,200,000 Less cost of goods sold: Beginning inventory O 100,000 Add cost of goods manufactured 700,000 700,000 Goods available for sale 700,000 800,000 Less ending inventory 100,000 Cost of goods sold 600,000 800,000 Gross margin 300,000 400,000 Less selling and administrative expenses 290,000 305,000 Operating profit E 10,000 E 95,000