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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