Question
Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month with the following unit costs: Direct materials $5.00 Direct labor 3.00
Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month with the following unit costs:
Direct materials | $5.00 |
Direct labor | 3.00 |
Variable overhead | 1.50 |
Fixed overhead | 7.00 |
Variable marketing cost | 1.20 |
Total fixed factory overhead is $280,000 per month. During October, 38,400 units were sold at a price of $24, and fixed marketing and administrative expenses were $130,500.
Required:
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Calculate the cost of each unit using absorption costing.
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How many units remain in ending inventory? What is the cost of ending inventory using absorption costing?
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Prepare an absorption-costing income statement for Pattison Products, Inc., for the month of October.
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