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Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit $ 18 Fixed costs per
Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit $ 18 Fixed costs per month: Pixed manufacturing overhead Pixed selling and administrative Total fixed cost per month $ 54,000 172,000 226,000 The product sells for $54 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced 18,000 18,000 Units Sold 14,000 22,000 Ll August The company's Accounting Department has prepared the following absorption costing income statements for July and August: July 756,000 1,188,000 280,000440 000 476,000 186,000 194,000 290,000 554,000 August Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income 748,000 Requirec 1. Determine the unit product cost under: a. Absorption costing b. Variable costing 2. Prepare contribution format variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes
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