Pabbatti Corporation, which has only one product, has provided the following data concerning its most...
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Accounting
Pabbatti Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price
$
106
Units in beginning inventory
1,080
Units produced
2,560
Units sold
3,270
Units in ending inventory
370
Variable costs per unit:
Direct materials
$
22
Direct labor
$
25
Variable manufacturing overhead
$
2
Variable selling and administrative
$
20
Fixed costs:
Fixed manufacturing overhead
$
53,760
Fixed selling and administrative
$
6,540
The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. (Hint: Use the reconciliation method.)
Required:
a. What is the unit product cost for the month under variable costing?
b. Prepare a contribution format income statement for the month using variable costing.
c. Without preparing an income statement, determine the absorption costing net operating income for the month.(Hint: Use the reconciliation method.)
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