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Please help ASAP The P. Talbot Company was organized just one month ago. The company manufactures and sells a unique product that has been quickly
Please help ASAP
The P. Talbot Company was organized just one month ago. The company manufactures and sells a unique product that has been quickly accepted by consumers. The results of the company's first month of operations are shown below (absorption costing basis): Sales (10,000 units @ $20) Less Cost of Goods Sold Gross Margin Less Selling and Administrative expenses Net Income $200,000 140,000 60,000 45.000 $15,000 Variable selling and administrative expenses are $2 per unit. The company produced 12,000 units during the month. Variable manufacturing costs total $10 per unit, and fixed manufacturing overhead costs total $48,000 per month. Show calculations wherever possible a) What is the ending inventory value using full-absorption costing? (2 marks) b) Using a Variable costing basis Income statement: What would be the Contribution margin? What would be the net income/loss? c) Reconcile the variable costing and absorption costing net income figures. d) During the second year of operations, the cost structure for the company remained the same. They produced 12,000 units of their product and sold 13,000 units. Without preparing financial statements, which method would have the highest net income and how much larger would it be? Explain whyStep by Step Solution
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