Nelter Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price$124Units in beginning inventory 380Units produced 6,810Units sold 6,620Units in ending inventory 570Variable costs per unit: Direct materials$41Direct labor$26Variable manufacturing overhead$2Variable selling and administrative expense$19Fixed costs: Fixed manufacturing overhead$136,200Fixed selling and administrative expense$66,200 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant 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.

Name: Nelter Corporation, which has only one product, has provided the follo
Uploaded: 2024-03-20T06:32:37.000Z
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Description: Nelter Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price$124Units in beginning inventory 380Units produced 6,810Units sold 6,620Units in ending inventory 570Varia

Variable Costing - In this costing method, variable costs are considered while preparing the cost of…

Answered: Nelter Corporation, which has only one…

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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Nelter Corporation, which has only one product, has provided the following data concerning its most recent month of operations:


Selling price	$	124
Units in beginning inventory		380
Units produced		6,810
Units sold		6,620
Units in ending inventory		570
Variable costs per unit:
Direct materials	$	41
Direct labor	$	26
Variable manufacturing overhead	$	2
Variable selling and administrative expense	$	19
Fixed costs:
Fixed manufacturing overhead	$	136,200
Fixed selling and administrative expense	$	66,200

The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant 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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