Convert the divisional absorption income statement to a contribution margin income statement for the quarter. Click here for an example showing how to convert from one approach to another. This example is for guidance only and the numbers have no bearing on Jokkmok Industries. You can also find several videos on YouTube that explain the difference between the two types of income statements.
Prepare absorption and contribution margin income statements for the succeeding quarter for the division.
Compute production costs per unit for both approaches and for both quarters.