High Country, Inc., produces and sells many recreational products. The company h

Question

High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: 47,000 42,000 Variable per unit Fixed (per month) $ 566,000 Manufacturing costs: Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (per month) $ 799,000 Management is anxious to assess the profitability of the new camp cot during the month of May

Explanation / Answer

1a) Unit product cost :

1b) Income statement :

2a) Unit product cost :

2b) Income statement :

Direct material 15 Direct labour 8 Variable manufacturing overhead 1 Fixed manufacturing overhead (799000/47000) 17 Total unit product cost 41

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