Reference no: EM132990288

Question - Nelter Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price $122

Units in beginning inventory 375

Units produced 6,800

Units sold 6,680

Units in ending inventory 495

Variable costs per unit:

Direct materials $47

Direct labor $20

Variable manufacturing overhead $2

Variable selling and administrative expense $21

Fixed costs:

Fixed manufacturing overhead $115,600

Fixed selling and administrative expense $86,840

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 -

a. Make a contribution format income statement for the month using variable costing.

b. Make an income statement for the month using absorption costing.