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F67 A B D 1 G XYZ Company manufactures and sells a single product. Cost data for the product is listed follow: 2. 3 Total = 20.0 marks 4 5 $10 6 Product Cost Data Variable costs per unit Direct materials Direct labour Variable factory overhead Variable selling and administrative Total variable costs per unit 18 7 8 8 6 9 $42 10 12 Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month 13 $216,000 338,000 $554,000 14 15 16 Units 7 The product sells for $98 per unit. The company started July with no finished goods inventory. Production and sales data for July and August are as follows: Beginning Ending Units Sold inventory Produced inventory July 0 54,000 46,000 8,000 August 8,000 48,000 52,000 4,000 3 . Note: Some green and blue highlighted areas may not need to be used. Required: 1. Determine the unit product cost under absorption costing and variable costing for July and August. (4 marks) Absorption Costing July August Variable Costing July August Unit product cost 34 Unit product cost 35 36 2. Prepare, in good form, operating income statements for Linden Company for August only using a) Absorption Costing. (6 marks) 5.0 37 38 Supporting calculations 39 40 41 42 43 44 45 46 47 48 49 50 5.0 51 b) Variable Costing (5 marks) 52 Supporting calculations 53 54 55 56 57 58 59 60 61 62 3.0 63 3. Reconcile Linden Company's operating income reported under absorption and variable costing for August only. Be specific about where the difference in operating income comes from. (3 marks) Supporting calculations Variable costing operating income (loss) 64 65 66 67 68 69 70 71 Absorption costing operating income (loss) P1 P2 P3 P4 New... 60 61 62 63 3. Reconcile Linden Company's operating income reported under absorption and variable costing for August only. Be specific about where the difference in operating income comes from. (3 marks) Supporting calculations Variable costing operating income (loss) 3.0 64 65 66 67 68 69 70 71 Absorption costing operating income (loss) 72 73 74 4. Compare the 2 costing methods and explain how each method is used by companies. (2 marks) 2.0 75 76 77 78 79 80 1 2 3