Question 2 Variable and Absorption Costing & Performance Analysis (TOTAL: 20 marks) Part A Softwood...
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Question 2 Variable and Absorption Costing & Performance Analysis (TOTAL: 20 marks) Part A Softwood Limited, which has only one product, has provided the following data concerning its operations for September: Selling prices $84 Units in beginning inventory 500 Units produced 1.900 Units sold 2.100 Unitsin ending inventory 300 Variable costs per unit Direct materials $25 Direct labour $10 Variable manufacturing overhead $7 Variable selling and administrative $10 Fixed costs Faed manufacturing overhead $38.000 Fored selling and administrative $21.000 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. Required (show your calculations): i. Compute the cost of a single unit of product under both the absorption costing and variable costing approaches. (5 Marks) Type in answers here (expand the space as needed) ii. Prepare a contribution format income statement for the month using variable costing (7 Marks)
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