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Penny Black Ltd., which has only one product, has provided the following data concerning its...

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Accounting

Penny Black Ltd., which has only one product, has provided the following data concerning its most recent month of operations:

Selling price

$98

Units in beginning inventory

0

Units produced

24,000

Units sold

18,000

Units in ending inventory

6,000

Variable costs per unit:

Direct materials

$29

Direct labor

$17

Variable manufacturing overhead

$8

Variable selling and administrative

$5

Fixed costs:

Fixed manufacturing overhead

$210,000

Fixed selling and administrative

$265,000

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 an income statement for the month using the contribution format and the variable costing method.
d. Prepare an income statement for the month using the traditional format and the absorption costing method.

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