During January 2020, ABC company produced 1,000 units of product Z with the following costs: Materials P6,000 Labor 3,300 Variable factory overhead 2,500 Fixed factory overhead 1,500 Total manufacturing costs P13,300 Selling and administrative costs incurred during the month were: Variable selling and administrative costs P3,200 Fixed selling and administrative costs 2,000 Total selling and administrative costs P5,000 ABC company uses JIT system. It does not keep inventories in stock. Instructions: What amount should be considered product cost for external reporting purposes? What is the product cost per unit under variable costing? What is the variable cost per unit for purposes of computing the contribution margin?
During January 2020, ABC company produced 1,000 units of product Z with the following costs:
Materials P6,000
Labor 3,300
Variable factory
Fixed factory overhead 1,500
Total
Selling and administrative costs incurred during the month were:
Variable selling and administrative costs P3,200
Fixed selling and administrative costs 2,000
Total selling and administrative costs P5,000
ABC company uses JIT system. It does not keep inventories in stock.
Instructions:
- What amount should be considered product cost for external reporting purposes?
- What is the product cost per unit under variable costing?
- What is the variable cost per unit for purposes of computing the contribution margin?
- What is the net income for January 2020 under absorption costing?
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