Solution-Compute the cost of a single unit of product

Compute the cost of a single unit of product

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Reference no: EM13509024

The EG Company produces and sells one product. The following data refer to the year just completed:


Beginning inventory		0
Units produced		28,100
Units sold		21,900

Sales price per unit	$	410
Selling and administrative expenses:
Variable per unit	$	23
Fixed (total)	$	306,600
Manufacturing costs:
Direct materials cost per unit	$	229
Direct labor cost per unit	$	58
Variable manufacturing overhead cost per unit	$	36
Fixed manufacturing overhead	$	421,500

Assume that direct labor is a variable cost.

Required:

a. Compute the cost of a single unit of product under both the absorption costing and variable costing approaches.
b. Prepare an income statement for the year using absorption costing.
c. Prepare a contribution format income statement for the year using variable costing.
d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.

Reference no: EM13509024

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Compute the cost of a single unit of product

Reference no: EM13509024

Reference no: EM13509024

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