Solution-What is the profit margin for each month

What is the profit margin for each month

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Question - BigScreen Corporation manufactures and sells 60-inch television sets. The company follows a practice of allocating fixed manufacturing cost over an achievable production capacity of 2,500 units. Data related to January, February, and March of 2020 are:

	January	February	March
Unit data
Beginning inventory	0	600	600
Production	2,000	1,600	2,500
Sales	1,400	1,600	3,000
Variable-cost data
Manufacturing costs per unit	$1,800	$1,800	$1,800
Marketing costs per unit	1,200	1,200	1,200
Fixed-cost data
Manufacturing costs	$800,000	$800,000	$800,000
Marketing costs	280,000	280,000	280,000

The selling price per unit is $6,500.

Required -

a. What is the Profit Margin for each month under 1) absorption costing and 2) variable costing? Provide a reconciliation between the two.

b. What is the ending inventory under 1) absorption costing and 2) variable costing?

Reference no: EM133152639

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What is the profit margin for each month

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Reference no: EM133152639

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