High Country, Incorporated, 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 plants operation:
Beginning inventory
Units produced
Units sold
Selling price per unit $
Selling and administrative expenses:
Variable per unit $
Fixed per month $
Manufacturing costs:
Direct materials cost per unit $
Direct labor cost per unit $
Variable manufacturing overhead cost per unit $
Fixed manufacturing overhead cost per month $
Management is anxious to assess the profitability of the new camp cot during the month of May.
Required:
Assume that the company uses absorption costing.
a Calculate the unit product cost.
b Prepare an income statement for May.
Assume that the company uses variable costing.
a Calculate the unit product cost.
b Prepare a contribution format income statement for May.
