Paint More, LLC, has organized a new division to manufacture and sell specialty paint. The divisions monthly costs are shown below:

Manufacturing costs:

Variable costs per unit: Direct materials $12

Variable manufacturing overhead $1 Fixed manufacturing overhead costs (total) $100,000

Selling and administrative costs: Variable 7% of sales Fixed (total) $31,000 Because the production is highly automated, the company includes its labor costs in its fixed manufacturing overhead. The gallons of paint sell for $68 each.

During September, the first month of operations, the following activity was recorded: Units produced 5,000 Units sold 4,000

Instructions:

Submit an Excel document with each tab labeled by item number that demonstrates the following:

1.Compute the unit product cost under:

a.Absorption costing

b.Variable costing

2.Prepare an absorption costing income statement for September

3.Prepare a contribution format income statement for September using variable costing