pls do not provide solution in image format thank you! Leander Office Products Inc. produces and sells small storage and organizational products for office use. During the first month ofoperations, the products sold well. Andrea Leander, the owner of the company, was surprised to see a loss for the month on herincome statement. This statement was prepared by a local bookkeeping service recommended to her by her bank manager. Thestatement follows:Sales (58,400 units)Variable expenses:Variable cost of goods sold*Variable selling and administrative expensesContribution marginFixed expenses:Fixed manufacturing overheadFixed selling and administrative expensesOperating lossLEANDER OFFICE PRODUCTS INC.Income StatementUnits producedUnits soldVariable costs per unit:Direct materialsDirect labourVariable manufacturing overheadVariable selling and administrative expensesUnit product cost*Consists of direct materials, direct labour, and variable manufacturing overhead.Leander is discouraged over the loss shown for the month, particularly since she had planned to use the statement to encourageinvestors to purchase shares in the new company. A friend who is an accountant insists that the company should be using absorptioncosting rather than variable costing. He argues that if absorption costing had been used, the company would probably have reported aprofit for the month.Selected cost data relating to the product and to the first month of operations follow:SalesCost of goods sold:4.45$167,60854,312Beginning inventoryAdd: Cost of goods manufacturedGoods available for saleLess: Ending inventory110,28428,032Gross marginSelling and administrative expensesOperating incomeRequired:1. Complete the following:a. Compute the unit product cost under absorption costing. (Round your answer to 2 decimal places.)0b. Redo the company's income statement for the month using absorption costing. (Do not leave any empty spaces; input a 0wherever it is required.)$350,40069,80058,400221,920128,480$1.50$ 1.08$0.29$0.93$ 350,400138,316$(9,836)0350,400$ 350,400Variable costing operating income (loss)Add: Fixed manufacturing overhead cost deferred in inventory under absorption costingAbsorption costing operating income (loss)c. Reconcile the variable and absorption costing operating income (loss) figures. (Loss amounts should be entered with a minussign.)$0 3. During the second month of operations, the company again produced 69,800 units but sold 81,200 units. (Assume no change intotal fixed costs.)a. Prepare a contribution format income statement for the month using variable costing.SalesVariable expenses:Variable cost of goods soldVariable selling and administrative expenseContribution marginFixed expenses:Fixed manufacturing overheadFixed selling and administrative expenseOperaing incomeSalesCost of goods sold:Beginning inventoryAdd: Cost of goods manufacturedGoods available for saleb. Prepare an income statement for the month using absorption costing. (Do not leave any empty spaces; input a 0 wherever it isrequired.)Less: Ending inventory0$S000000Gross marginSelling and administrative expensesOperaing incomec. Reconcile the variable costing and absorption costing operating income figures.0Variable costing operating income (loss)Deduct: Fixed manufacturing overhead cost released from inventory under absorption costingAbsorption costing operating income (loss)$0

Under Variable Costing the unit product cost consists of only direct materials, direct labor and…

Leander Office Products Inc. produces and sells small storage and organizational products for office use. During the first month of operations, the products sold well. Andrea Leander, the owner of the company, was surprised to see a loss for the month on her income statement. This statement was prepared by a local bookkeeping service recommended to her by her bank manager. The statement follows: Sales (58,400 units) Variable expenses: Variable cost of goods sold* Variable selling and administrative expenses Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expenses Operating loss LEANDER OFFICE PRODUCTS INC. Income Statement Units produced Units sold Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative expenses Unit product cost *Consists of direct materials, direct labour, and variable manufacturing overhead. Leander is discouraged over the loss shown for the month, particularly since she had planned to use the statement to encourage investors to purchase shares in the new company. A friend who is an accountant insists that the company should be using absorption costing rather than variable costing. He argues that if absorption costing had been used, the company would probably have reported a profit for the month. Selected cost data relating to the product and to the first month of operations follow: Sales Cost of goods sold: 4.45 Beginning inventory Add: Cost of goods manufactured Goods available for sale Less: Ending inventory $167,608 54,312 Gross margin Selling and administrative expenses Operating income 110,284 28,032 0 Required: 1. Complete the following: a. Compute the unit product cost under absorption costing. (Round your answer to 2 decimal places.) $ b. Redo the company's income statement for the month using absorption costing. (Do not leave any empty spaces; input a 0 wherever it is required.) $350,400 69,800 58,400 221,920 128,480 $ 1.50 $ 1.08 138,316 $ (9,836) $ 0.29 $ 0.93 350,400 0 350.400 $ 350,400 Variable costing operating income (loss) Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Absorption costing operating income (loss) c. Reconcile the variable and absorption costing operating income (loss) figures. (Loss amounts should be entered with a minus sign.) $ 0