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The Snow Company began the year with no inventories of work in process or finished goods. The company projected the following costs for the year:
Variable costs:
Direct materials $18 per unit
Direct labour $12 per unit
Manufacturing overhead $ 8 per unit
Selling expenses $ 4 per unit
Fixed costs:
Manufacturing overhead $90,000 per month
Selling and administrative $40,000 per month
During the first three months of the year, production and sales in units were as follows:
Production Sales
January 30,000 30,000
February 30,000 26,000
March 30,000 34,000
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