Only do 2b High Country, Inc., produces and sells many recreational products. Th
ID: 2566407 • Letter: O
Question
Only do 2b
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a foldingg 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 uni Selling and administrative expenses: 46,000 41,000 76 Variable per unit Fixed (per month) 564,000 Manufacturing costs: 15 Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (per month) $ $ 736, 000 Management is anxious to assess the profitability of the new camp cot during the month of May. Required 1. Assume that the company uses absorption costing a. Determine the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing a. Determine the unit product cost. b. Prepare a contribution format income statement for Mav.Explanation / Answer
Income Statement-Variable Costing Sales (41000 x 76) 3116000 Less: Direct Material (41000 x 15) 615000 Direct labor (41000 x 9) 369000 Manufacturing Overhead (41000 x 3) 123000 Selling Overhead (41000 x 3) 123000 Contribution margin 1886000 Less: Fixed manufacturing costs 736000 Fixed selling and administrative expenses 564000 Income from operations 586000
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