Q1) Variable and absorption costing unit product costs and income statement; Description of Difference in Net Operating Income [LO1, LO2, LO3]
Wiengot Antennas, Inc., manufactures and sells unique type of TV antenna. Company has now opened a new plant of manufacture antenna, and following cost and revenue data have been given for first month of plant\\\'s operation in form of a worksheet.
| Beginning inventory |
$0 |
| Units Produced |
40,000 |
| Units Sold |
35,000 |
| Selling price per unit |
$60 |
| Selling and administrative expenses: |
| Variable per unit |
$2 |
| Fixed (total) |
$560,000 |
| Manufacturing costs: |
| Direct material cost per unit |
$15 |
| Direct labor cost per unit |
$7 |
| Variable manufacturing overhead cost per unit |
$2 |
| Fixed manufacturing overhead cost (total) |
$640,000 |
As new antenna is unique in design, management is anxious to see how profitable it will be and has asked that income statement be made for the month.
Required:
Suppose that company uses variable costing. Find out the unit product cost.