Waterway Products manufactures and sells a variety of camping products. Recently the company opened a new factory to manufacture a deluxe portable cooking unit. Cost and sales data for the first month of operation are shown below:

Beginning inventory		0	units
Units produced		10,100
Units sold		9,100
Manufacturing costs
Fixed overhead		$111,100
Variable overhead		$4	per unit
Direct labour		$9	per unit
Direct material		$27	per unit
Selling and administrative costs
Fixed		$196,400
Variable		$3	per unit sold

The portable cooking unit sells for $112. Management is interested in the opening months results and has asked for an income statement.

(a)

Partially correct answer icon

Your answer is partially correct.

Assuming the company uses variable costing: 1. Calculate the manufacturing cost per unit.

Manufacturing cost

$enter the manufacturing cost per unit in dollars

per unit

2. Prepare a variable-costing income statement for the first month of operation.

WaterwayProducts Income StatementVariable Costing For the first month of operations
select an income statement item Total fixed costsTotal variable costsSalesFixed costsVariable cost of goods soldFixed selling and administrative expensesVariable selling and administrative expensesFixed manufacturing overheadOperating incomeContribution marginVariable costs				$enter a dollar amount
select between addition and deduction AddLess: select an opening name for section one Variable cost of goods soldTotal variable costsFixed costsOperating incomeVariable costsVariable selling and administrative expensesTotal fixed costsContribution marginFixed manufacturing overheadFixed selling and administrative expensesSales
select an income statement item Variable cost of goods soldVariable selling and administrative expensesContribution marginFixed manufacturing overheadFixed selling and administrative expensesSalesOperating incomeTotal fixed costsFixed costsTotal variable costsVariable costs		$enter a dollar amount
select an income statement item Fixed manufacturing overheadVariable costsTotal fixed costsVariable selling and administrative expensesFixed selling and administrative expensesSalesOperating incomeContribution marginTotal variable costsFixed costsVariable cost of goods sold		enter a dollar amount
select a closing name for section one Operating incomeTotal variable costsContribution marginTotal fixed costsVariable selling and administrative expensesFixed selling and administrative expensesSalesFixed manufacturing overheadVariable cost of goods soldFixed costsVariable costs				enter a total amount for section one
select a summarirzing line for the first part Total variable costsFixed selling and administrative expensesFixed manufacturing overheadVariable selling and administrative expensesContribution marginOperating incomeVariable cost of goods soldVariable costsSalesTotal fixed costsFixed costs				enter a total amount for the first part
select between addition and deduction AddLess: select an opening name for section two Fixed manufacturing overheadSalesContribution marginVariable selling and administrative expensesTotal variable costsVariable costsTotal fixed costsFixed costsFixed selling and administrative expensesOperating incomeVariable cost of goods sold
select an income statement item Fixed selling and administrative expensesVariable selling and administrative expensesFixed manufacturing overheadSalesOperating incomeTotal fixed costsVariable costsTotal variable costsContribution marginFixed costsVariable cost of goods sold		enter a dollar amount
select an income statement item Fixed manufacturing overheadVariable selling and administrative expensesVariable costsVariable cost of goods soldTotal variable costsTotal fixed costsFixed costsOperating incomeFixed selling and administrative expensesContribution marginSales		enter a dollar amount
select a closing name for section two Variable selling and administrative expensesContribution marginFixed manufacturing overheadSalesTotal variable costsVariable costsFixed costsVariable cost of goods soldTotal fixed costsOperating incomeFixed selling and administrative expenses				enter a total amount for section two
select a closing name for this statement Fixed manufacturing overheadVariable cost of goods soldFixed selling and administrative expensesSalesOperating incomeTotal fixed costsContribution marginVariable costsFixed costsTotal variable costsVariable selling and administrative expenses				$enter a total amount for this statement

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Attempts: 3 of 3 used

(b)

Reconcile the difference in net income between the absorption-costing and variable-costing methods.

Variable costing operating income		$enter a dollar amount
Fixed manufacturing overhead costs deferred in ending inventory		enter a dollar amount
Absorption costing operating income		$enter a total amount