Maher Corporation, which has only one product, has provided the following data c

Question

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

Required:

a. What is the unit product cost for the month under variable costing?

b. What is the unit product cost for the month under absorption costing?

c. Prepare a contribution format income statement for the month using variable costing.

d. Prepare an income statement for the month using absorption costing.

e. Reconcile the variable costing and absorption costing net operating incomes for the month.

Selling price $ 198 Units in beginning inventory 0 Units produced 3,230 Units sold 3,060 Units in ending inventory 170 Variable costs per unit: Direct materials $ 55 Direct labor $ 55 Variable manufacturing overhead $ 14 Variable selling and administrative expense $ 13 Fixed costs: Fixed manufacturing overhead $ 109,820 Fixed selling and administrative $ 12,240

Explanation / Answer

a)

b)

c)

d)

e)

Computation of Unit Product Cost Variable Costing Direct Meterial $                   55.00 Direct Labour $                   55.00 Variable Manufactoring Overhead $                   14.00 Unit Product Cost $                 124.00

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