Compute the cost of a single unit of product

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Reference no: EM13509024

The EG Company produces and sells one product. The following data refer to the year just completed:




Beginning inventory
0
Units produced
28,100
Units sold
21,900



Sales price per unit $ 410
Selling and administrative expenses:

Variable per unit $ 23
Fixed (total) $ 306,600
Manufacturing costs:

Direct materials cost per unit $ 229
Direct labor cost per unit $ 58
Variable manufacturing overhead cost per unit $ 36
Fixed manufacturing overhead $ 421,500

Assume that direct labor is a variable cost.

Required:

a. Compute the cost of a single unit of product under both the absorption costing and variable costing approaches.
b. Prepare an income statement for the year using absorption costing.
c. Prepare a contribution format income statement for the year using variable costing.
d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.

 

Reference no: EM13509024

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