Reference no: EM132784196

Legaz 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 labour ............................................................ $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:

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

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

problem c. Prepare income statement for the month using the contribution (the variable costing method).

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

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