Oakford Company, which has only one product, has provided the following data concerning its most recent month of operations:
|
Selling price |
$143 |
|
Units in beginning inventory |
0 |
|
Units produced |
1,200 |
|
Units sold |
1,000 |
|
Units in ending inventory |
200 |
|
Variable costs per unit: |
|
|
Direct materials |
$33 |
|
Direct labor |
$52 |
|
Variable manufacturing overhead |
$1 |
|
Variable selling and administrative |
$7 |
|
Fixed costs: |
|
|
Fixed manufacturing overhead |
$38,400 |
|
Fixed selling and administrative |
$4,000 |
Required:
a. Prepare an income statement for the month using the contribution format and the variable costing method.
b. Prepare an income statement for the month using the absorption costing method.