Zurgot Inc. has just organized a new division to manufacture and sell specially designed computer tables, using select hardwoods. The divisions monthly costs are shown in the schedule below:

Manufacturing costs:
Variable costs per unit:
Direct materials	$	162
Variable manufacturing overhead	$	11
Fixed manufacturing overhead costs (total)	$	605,680
Selling and administrative costs:
Variable		15	% of sales
Fixed (total)	$	352,560

Zurgot regards all of its workers as full-time employees, and the company has a long-standing no-layoff policy. Furthermore, production is highly automated. Accordingly, the company includes its labour costs in its fixed manufacturing overhead. The tables sell for $538 each.

During the first month of operations, the following activity was recorded:

Units produced		4,520
Units sold		3,430

Required: (ALL THE NUMBERS IN THE TABLES ARE MY GUESSES I WANT TO KNOW WHAT THE ACTUAL ANSWERS ARE)

1. Compute the unit product cost under each of the following costing method.

2. Prepare an income statement for the month using absorption costing. (Do not leave any empty spaces; input a 0 wherever it is required.)

3. Prepare a contribution format income statement for the month using variable costing. (Do not leave any empty spaces; input a 0 wherever it is required.)

5. Reconcile the absorption costing and variable costing operating income figures in (2) and (3) above.

Unit Product Cost 307 a. Absorption costing b. Variable costing 173 $ 1,845,340 $ 0 Sales Cost of goods sold: Beginning inventory Add: Cost of goods manufactured Goods available for sale Less: Ending inventory Gross margin Selling and administrative expenses Operaing income 0 0 1,845,340 $ 1,845,340 $ 1,845,340 $ 0 37,730 Sales Variable expenses: Variable cost of goods sold: Beginning inventory Add: Variable manufacturing costs Goods available for sale Less: Ending inventory Cost of goods sold Variable selling and administrative expense Contribution margin Fixed expenses: Fixed selling and administrative expense Fixed manufacturing overhead Operating income 37,730 188,570 (150,840) 870, 191 719,351 1,125,989 352,560 605,680 958,240 167,749 Variable costing operating income (loss) Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Absorption costing operating income (loss) $ 0