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Problem 6. Italia Espresso Machina Inc. produces a single product. Data concerning the company's operations last year appear below Units in beginning inventory Units produced
Problem 6. Italia Espresso Machina Inc. produces a single product. Data concerning the company's operations last year appear below Units in beginning inventory Units produced Units sold 2,000 1,900 Selling price per unit $100 Variable costs per unit Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $30 $10 $5 $2 Fixed costs in total Fixed manufacturing overhead Fixed selling and administrative 40,000 $60,000 Required a. Compute the unit product cost under both absorption and variable costing b. Prepare an income statement for the year using absorption costing c. Prepare a contribution format income statement for the year using variable costing d. Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year
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