Reference no: EM13929150

1  Sunshine Company, which has only one product, has provided the following data concerning its most recent month of operations

	Selling price.............................................................	$120
	Units in beginning inventory....................................	100
	Units produced.......................................................	3,900
	Units sold................................................................	3,600
	Units in ending inventory.........................................	400
	Variable costs per unit:
	Direct materials....................................................	$31
	Direct labor..........................................................	$54
	Variable manufacturing overhead.........................	$5
	Variable selling and administrative........................	$8
	Fixed costs:
	Fixed manufacturing overhead.............................	$54,600
	Fixed selling and administrative............................	$21,600

                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.       What is the unit product cost for the month under variable costing?

b.      What is the unit product cost for the month under absorption costing?

c.       Prepare an income statement for the month using the contribution format and the variable costing method.

d.      Prepare an income statement for the month using the absorption costing method.

e.       Reconcile the variable costing and absorption costing net operating incomes for the month.