Question

Maher Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price	$	187
Units in beginning inventory		0
Units produced		3,180
Units sold		2,810
Units in ending inventory		370
Variable costs per unit:
Direct materials	$	52
Direct labor	$	58
Variable manufacturing overhead	$	15
Variable selling and administrative expense	$	17
Fixed costs:
Fixed manufacturing overhead	$	111,300
Fixed selling and administrative	$	8,430

Required:

a. What is the unit product cost for the month under variable costing?

b. What is the unit product cost for the month under absorption costing?

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

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.

1. variable costing=

2. Absorption costing =

3.

4.

5.

Variable Costing Income Statement Variable expenses: Fixed expenses: Absorption Costing Income Statement Gross margin Selling and administrative expenses: Net operating income Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Variable costing net operating income (loss) Absorption costing net operating income (loss)

Answer 1

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