60.1K

Verified Solution

Link Copied!

for 2nd question:

1.determine the unit product cost under:

a. absorption costing

b. variable costing

2. prepare variable costing income statements for july and august

3. Reconcile the variable costing and absorption costing net operating income

High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation: 0 38,000 33,000 78 $ Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses Variable per unit Fixed (per month) Manufacturing costs: Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead coat (per month) $ 2 $ 563,000 $ 15 $ 6 $ $ 608,000 Management is anxious to assess the profitability of the new camp cot during the month of May. Required: 1. Assume that the company uses absorption costing. a. Determine the unit product cost. b. Prepare an income statement for May 2. Assume that the company uses variable costing. a. Determine the unit product cost. b. Prepare a contribution format income statement for May Intha thakala Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month Pixed manufacturing overhead Fixed selling and administrative Total fixed cost per month S 3 10 2 1 $ 16 $ 63,000 169.000 $ 232,000 The product sells for $50 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced 21,000 21,000 Units Sold 17,000 25,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income July $ 850,000 306,000 544,000 186,000 $ 358,000 August $ 1,250,000 450,000 800,000 194.000 $ 606,000

Answer & Explanation Solved by verified expert

See Answer