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Maga Company, which has only one product, has provided the following data concerning its most recent month of operations: |
| Selling price | $ | 187 |
| Units in beginning inventory | 0 | |
| Units produced | 3,180 | |
| Units sold | 2,810 | |
| Units in ending inventory | 370 | |
| Variable cost per unit: | ||
| Direct materials | $ | 52 |
| Direct labor | $ | 58 |
| Variable manufacturing overhead | $ | 15 |
| Variable selling and administrative | $ | 17 |
| Fixed costs: | ||
| Fixed manufacturing overhead | $ | 111,300 |
| Fixed selling and administrative | $ | 8,430 |
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| Required: |
| a. |
What is the unit product cost for the month under variable costing? (Do not round intermediate calculations. Omit the “$” sign in your response.) |
| Cost per unit | |
| Variable costing | $ |
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| b. |
What is the unit product cost for the month under absorption costing? (Omit the “$” sign in your response.) |
| Cost per unit | |
| Absorption costing | $ |
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| c. |
Prepare a contribution format income statement for the month using variable costing. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the “$” sign in your response.) |
| Variable Costing Income Statement | ||
| (Click to select) Sales Selling and administrative expenses Contribution margin Manufacturing overhead Net operating income (loss) Variable cost of goods sold Variable selling and administrative expenses | $ | |
| Variable expenses: | ||
| (Click to select) Direct labor Net operating income Variable selling and administrative expenses Direct materials Contribution margin Variable cost of goods sold Sales | $ | |
| (Click to select) Direct materials Variable cost of goods sold Direct labor Sales Contribution margin Net operating income Variable selling and administrative expenses | ||
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| (Click to select) Contribution margin Sales Variable cost of goods sold Manufacturing overhead Selling and administrative expenses Net operating income (loss) Variable selling and administrative expenses | ||
| Fixed expenses: | ||
| (Click to select) Fixed selling and administrative expenses Variable selling and administrative expenses Contribution margin Variable cost of goods sold Net operating income Sales Fixed manufacturing overhead | ||
| (Click to select) Variable cost of goods sold Fixed manufacturing overhead Net operating income Variable selling and administrative expenses Fixed selling and administrative expenses Contribution margin Sales | ||
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| (Click to select) Contribution margin Manufacturing overhead Variable selling and administrative expenses Variable cost of goods sold Selling and administrative expenses Sales Net operating income (loss) | $ | |
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| d. |
Prepare an income statement for the month using absorption costing. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the “$” sign in your response.) |
| Absorption Costing Income Statement | |||
| (Click to select) Sales Cost of goods sold Net operating income (loss) Fixed selling and administrative expenses Variable selling and administrative expenses Gross margin | $ | ||
| (Click to select) Fixed selling and administrative expenses Cost of goods sold Sales Gross margin Net operating income (loss) Variable selling and administrative expenses | |||
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| (Click to select) Net operating income (loss) Fixed selling and administrative expenses Gross margin Variable selling and administrative expenses Sales Cost of goods sold | |||
| Selling and administrative expenses: | |||
| (Click to select) Sales Variable selling and administrative expenses Cost of goods sold Fixed selling and administrative expenses Gross margin Net operating income (loss) | $ | ||
| (Click to select) Fixed selling and administrative expenses Variable selling and administrative expenses Sales Gross margin Net operating income (loss) Cost of goods sold | |||
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| (Click to select) Fixed selling and administrative expenses Net operating income (loss) Cost of goods sold Gross margin Sales Variable selling and administrative expenses | $ | ||
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| e. |
Reconcile the variable costing and absorption costing net operating incomes for the month. (Omit the “$” sign in your response.) |
| Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes | |
| Variable costing net operating income | $ |
| (Click to select) Deduct Add : (Click to select) Fixed manufacturing overhead costs deferred in inventory under absorption costing Fixed manufacturing overhead costs released from inventory under absorption costing | |
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| Absorption costing net operating income | $ |
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