Denton Company manufactures and sells a single product. Cost data for the produc

Question

Denton Company manufactures and sells a single product. Cost data for the product are given below Direct labor Variable selling and administrative cost per unit Total Foxed costs per month 150,000 175,000 Total foxed cost per month The product sells for $48 per unit. Production and sales data for July and August, the first two months or operations, are as tollows 30,000 30,000 26,000 34,000 The company's Accounting Department has prepared absorption costing income statements for July and August as presented below Cost of goods sold Gross margin 650.000 850,000 227,000 243,000 ?371.000-$ 539.000 1. Determine the unit product cost under absorption costing and variable costing

Explanation / Answer

Solution 2:

Solution 3:

Variable costing Income Statement - Denton Company Particulars July August Sales $1,248,000.00 $1,632,000.00 Variable Cost: Direct Material $156,000.00 $204,000.00 Direct Labor $260,000.00 $340,000.00 Variable Manufacturing overhead $104,000.00 $136,000.00 Variable Selling and Administrative Expenses $52,000.00 $68,000.00 Contribution $676,000.00 $884,000.00 Fixed Manufacturing Overhead $150,000.00 $150,000.00 Fixed Selling & Administrative Expenses $175,000.00 $175,000.00 Net Operating Income $351,000.00 $559,000.00

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