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: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month The product sells for $51 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced Sales Cost of goods sold. Units Sold 17,000 25,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: $5 12 2 1 $ 20 21,000 21,000 Gross margin Selling and administrative expenses Net operating income $ 84,000 172,000 $ 256,000 July August $ 867,000 $1,275,000 391,000 476,000 189,000 $ 287,000 575,000 700,000 197,000 $ 503,000 Required: 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 incomes. Complete this question by entering your answers in the tabs below.

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: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month The product sells for $51 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced Sales Cost of goods sold. Units Sold 17,000 25,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: $5 12 2 1 $ 20 21,000 21,000 Gross margin Selling and administrative expenses Net operating income $ 84,000 172,000 $ 256,000 July August $ 867,000 $1,275,000 391,000 476,000 189,000 $ 287,000 575,000 700,000 197,000 $ 503,000 Required: 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 incomes. Complete this question by entering your answers in the tabs below.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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