Nelter Corporation, which has only one product, has provided the following data

Question

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

Nelter Corporation, which has only one product, has provided the following data concerning its most recent month of operations: 10 Selling price Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per $124 380 6,810 6,620 570 Skipped unit: 41 26 Direct materials Direct labor Variable manufacturing overhead Variable Belling and administrative expense 19 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expenBe $136,200 $ 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. Complete this question by entering your answers in the tabs below Required A Required B Prepare a contribution format income statement for the month using variable costing Mc Graw Hill

Explanation / Answer

a) Income Statement as per Contribution format : Unit Amount $ Sales Revenue (6620 units) 124 820880 Less: Variable costs: DM 41 271420 DL 26 172120 VMO 2 13240 VSAE 19 125780 Total Variable costs 88 582560 Contribution 36 238320 Less: Fixed Costs: FMO 136200 FSAE 66200 Total Fixed Costs 202400 NOI 35920 b) Income Statement as Absorption format : Amount $ Sales Revenue 820880 Less: Manufacturing costs: DM 271420 DL 172120 VMO 13240 FMO 136200 Less: FMO of CS 136200*570/6810 -11400 Net Manufacturing costs 581580 Gross Profit 239300 Less: Selling and Admin costs: VSAE 125780 FSAE 66200 Total Selling and Adm costs 191980 NOI 47320

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