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Dance Creations manufactures authentic Hawaiian hula skirts that are purchased for traditional Hawaiian celebrations, costume parties, and other functions. During its first year of business, the company incurred the following costs:

Variable cost per Hula Skirt

Direct materials- $9.60

Direct labor- 3.40

variable manufacturing overhead- 1.05

variable selling and administrative expense- 0.40

Fixed cost per month

fixed manufacturing overhead- $16,125

fixed selling and administrative expense- 4,950

Dance Creations charges $30 for each skirt that it sells. During the first month of operation, it made 1,500 skirts and sold 1,375.

Required: 1. Assuming Dance Creations uses variable costing, calculate the variable manufacturing cost per unit for last month. 2. Complete a variable costing income statement for the last month. 3. Assuming Dance Creations uses full absorption costing, calculate the full manufacturing cost per unit for the last month. 4. Complete a full absorption costing income statement. 6. Suppose next month Dance Creations expects to produce 1,500 hula skirts and sell 1,600. Without recreating the new income statements, calculate the difference in profit between variable costing and full absorption costing. Which would be higher?

Complete a variable costing income statement for last month. (F Dance Creations Contribution Margin Income Statement For the Last Month Sales Revenue | $ 41,250.00 Variable Costs Contribution Margin Fixed Costs Net Operating Income Complete a full absorption costing income statement. (Round decimal places.) Dance Creations Full Absorption Income Statement For Last Month Sales Revenue $ Cost of Goods Sold 41,250.00 Gross Margin Selling and Administrative Expenses Net Operating Income

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