XYZ Corporation, a single product line company, provided the following information about last month's operations:...
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Accounting
XYZ Corporation, a single product line company, provided the following information about last month's operations:
| Selling price | $ | 125 |
| Units in beginning inventory | 395 | |
| Units produced | 6,210 | |
| Units sold | 6,420 | |
| Units in ending inventory | 185 | |
| Variable costs per unit: | ||
| Direct materials | $ | 47 |
| Direct labor | $ | 24 |
| Variable manufacturing overhead | $ | 3 |
| Variable selling and administrative expense | $ | 18 |
| Fixed costs: | ||
| Fixed manufacturing overhead | $ | 105,570 |
| Fixed selling and administrative expense | $ | 89,880 |
The number of units sold changes every month, however, the number of units produced is the same every month. The company's variable costs per unit and total fixed costs have been the same from month to month.
Required:
a. Prepare a contribution format income statement for the month using variable costing.
b. Prepare an income statement for the month using absorption costing.
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