Question 2 Fresh Air Products manufactures and sells a variety of camping products. Recently the company opened a new plant to manufacture a deluxe portable cooking unit. Cost and sales data for the first month of operations are shown below Beginning inventory O units Units produced 10,400 Units sold 9,100 Manufacturing costs Fixed overhead $93,600 Variable overhead $3 per unit Direct labour $10 per unit Direct material $25 per unit Selling and administrative costs Fixed $200,100 Variable $3 per unit sold The portable cooking unt sells for $111. Management is interested in the opening month's results and has asked for an income statement Your answer is correct Assuming the company uses variable costing 1. Calculate the manufacturing cost per un Manufacturing cost 38 per unit 2. Prepare a variable costing income statement for the fest month of operation Fresh Air Products 2. Prepare a variable-costing income statement for the first month of operation. Fresh Air Products Income Statement-Variable Costing For the first month of operations Sales 1010100 Less Variable costs Variable cost of goods sold 345800 Total variable costs 373100 > Contribution margin 637000 Less Fixed costs Fixed manufacturing overhead 93600 Operating income before tax 343300 SHOW SOLUTION (b) Reconcile the difference in net income between the absorption-costing and variable-costing methods. Variable costing operating income Fixed manufacturing overhead costs deferred in ending inventory Absorption costing operating income LINK TO TEXT LINK TO TEXT