Pabbatti Corporation, which has only one product, has providedthe following data concerning its most recent month ofoperations:
| | |
| Selling price | $ | 94 |
| Units in beginning inventory | | 850 |
| Units produced | | 2,660 |
| Units sold | | 3,190 |
| Units in ending inventory | | 320 |
| Variable costs per unit: | | |
| Direct materials | $ | 23 |
| Direct labor | $ | 16 |
| Variable manufacturing overhead | $ | 1 |
| Variable selling and administrative | $ | 19 |
| Fixed costs: | | |
| Fixed manufacturing overhead | $ | 61,180 |
| Fixed selling and administrative | $ | 9,570 |
|
The company produces the same number of units every month,although the sales in units vary from month to month. The company'svariable costs per unit and total fixed costs have been constantfrom month to month. (Hint: Use the reconciliation method.)
Required:
a. What is the unit product cost for the monthunder variable costing?
b. Prepare a contribution format incomestatement for the month using variable costing.
c. Without preparing an income statement,determine the absorption costing net operating income for themonth.(Hint: Use the reconciliation method.)
