Required:

Complete the following:

a$.$ Compute the unit product cost under absorption costing. $($Round your answer to $2$ decimal places.$)$

Unit product cost

b$.$ Redo the company's income statement for the month using absorption costing. $($Do not leave any empty spaces; input a $0$ wherever it is required.$)$ c$.$ Reconcile the variable and absorption costing operating income $($loss$)$ figures. $($Loss amounts should be entered with a minus sign.$)$

$\backslash$table$[[,],[$Variable costing operating income $($loss$),$$$,(11,1],[$Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing,$17],[$Absorption costing operating income $($loss$),$$$,6]]$

This part of the question is not part of your Connect assignment.

During the second month of operations, the company again produced $61,650$ units but sold $72,100$ units. $($Assume no change in total fixed costs.$)$

a$.$ Prepare a contribution format income statement for the month using variable costing.

$\backslash$table$[[$Sales$,,$$$,69,486],[$Variable expenses:$],[$Variable cost of goods sold,$$,180,250,,],[$Variable selling and administrative expense,$72,821,,253,071],[$Contribution margin,,,$(183,585)],[$Fixed expenses:$],[$Fixed manufacturing overhead,$104,805,,],[$Fixed selling and administrative expense,$18,944,,123,749],[$Operaing income,,$$,(307,334)]]$ b$.$ Prepare an income statement for the month using absorption costing. $($Do not leave any empty spaces; input a $0$ wherever it is required.$)$

c$.$ Reconcile the variable costing and absorption costing operating income figures.

$\begin{array}{cc}?& ?\\ \text{V}\text{a}\text{r}\text{i}\text{a}\text{b}\text{l}\text{e}costing\text{o}\text{p}\text{e}\text{r}\text{a}\text{t}\text{i}\text{n}\text{g}\text{i}\text{n}\text{c}\text{o}\text{m}\text{e}(loss)& ?\\ \text{D}\text{e}\text{d}\text{u}\text{c}\text{t}\text{:}\text{F}\text{i}\text{x}\text{e}\text{d}\text{m}\text{a}\text{n}\text{u}\text{f}\text{a}\text{c}\text{t}\text{u}\text{r}\text{i}\text{n}\text{g}\text{o}\text{v}\text{e}\text{r}\text{h}\text{e}\text{a}\text{d}cost\text{r}\text{e}\text{l}\text{e}\text{a}\text{s}\text{e}\text{d}\text{f}\text{r}\text{o}\text{m}\text{i}\text{n}\text{v}\text{e}\text{n}\text{t}\text{o}\text{r}\text{y}\text{u}\text{n}\text{d}\text{e}\text{r}absorptioncosting& ?\\ \text{A}\text{b}\text{s}\text{o}\text{r}\text{p}\text{t}\text{i}\text{o}\text{n}costing\text{o}\text{p}\text{e}\text{r}\text{a}\text{t}\text{i}\text{n}\text{g}\text{i}\text{n}\text{c}\text{o}\text{m}\text{e}(loss)& \text{\$}\end{array}$Leander Office Products Inc. produces and sells small storage and organizational products

for office use. During the first month of operations, the products sold well. Andrea Leander,

the owner of the company, was surprised to see a loss for the month on her income

statement. This statement was prepared by a local bookkeeping service recommended to

her by her bank manager. The statement follows:

$*$Consists of direct materials, direct labour, and variable manufacturing overhead.

Leander is discouraged over the loss shown for the month, particularly since she had

planned to use the statement to encourage investors to purchase shares in the new

company. A friend who is an accountant insists that the company should be using

absorption costing rather than variable costing. He argues that if absorption costing had

been used, the company would probably have reported a profit for the month.

Selected cost data relating to the product and to the first month of operations follow: