Help Save E which has only one product has provided the fol

Help Save & E which has only one product, has provided the following data conicerning its most recent month of operations 2 S 138 Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: 4,188 s 31 s 59 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs Fixed manufacturing overhead Fixed selling and administrative expense $94,300 47,380 The company produces the same number of units every month, although the sales in units vary from month to month. The company\'s varlable costs per unit and total fixed costs have been constant from month to month a. What is the unit product cost for the month under varlable costing? b, what is the unit product cost for the month under absorption costing? c. Prepare a contr d. Prepare an income statement for the month using absorption costing. e. Reconcile the variable costing and absorption costing net operating incomes for the month format income statement for the month using varlable costing. Prey 22 of 22 Next HNe e here to search

Solution

A&B Variable Costing Absorption Costing Unit Product Costs: For Absorption Costing: Direct Material 31.00 31.00 Fixed Manufacturing Cost 94300 Direct Labor 59.00 59.00 Units Produced 4100 Variable Manufacturing Cost 4.00 4.00 Fixed Manufacturing Cost 23.00 Fixed Manufacturing Cost 0.00 23.00 Unit Product Costs 94.00 117.00 C Lefelmann Corporation Contribution Format Income Statement Sales (4300*138) 593400 Less: Variable Cost of Goods Sold 404200 (4300*94) Gross Contribution 189200 Less: Variable Selling & Administrative 38700 Net Contribution Margin 150500 Less: Fixed Manufacturing Overhead 94300 Less: Fixed S&A Overhead 47200 Net Operating Income 9000 D Lefelmann Corporation Income Statement Sales (4300*138) 593400 Less: Cost of Goods Sold: Opening Inventory (500*117) 58500 Add: Units Produced (4100*117) 479700 Total Cost of Goods Available for Sales 538200 Less: Closing Units (300*117) 35100 Cost of Goods Sold 503100 Gross Income 90300 Less: Selling & Administartive Exp Variable S&A(4300*9) 38700 Fixed S&A 47200 Net Operating Income 4400 E Reonciliation of Variable Costing & Absorption Costing: Net Operating Income as per Variable Costing 9000 Less: Fixed Cost Component of Closing Inventory 4600 (200*23) Net Operating Income as per Absorption Costing 4400