Assume the company uses absorption costing calculate the

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Reference no: EM13592409

Fresh Air Products Company manufactures and sells a variety of camping products. Recently the company opened a new plant to manufacture a deluxe portable cooking unit. Cost and sales data for the first month of operations are shown below:

Manufacturing Costs
Fixed Overhead $120,000
Variable overhead $3 per unit
Direct labor $12 per unit
Direct material $30 per unit
Beginning inventory 0 units
Units produced 10,000
Units sold 8,000
Selling and Administrative Costs
Fixed $200,000
Variable $4 per unit sold

The portable cooking unit sells for $110. Management is interested in the opening month's results and has asked for an income statement.

Instructions
Assume the company uses absorption costing. Calculate the production cost per unit and prepare an income statement for the month of June, 2011.

Reference no: EM13592409

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