Problem: Qadir Company, which has only one product, has provided the following data concerning its most recent month of operations
Selling Price $93
Units in beginning inventory 0
Units produced 5,400
Units sold 5,200
Units in ending inventory 200
Variable costs per unit:
Direct materials $24
Direct labor 27
Variable Manufacturing overhead 2
Variable selling and administrative 10
Fixed costs:
Fixed manufacturing overhead $108,000
Fixed selling and administrative 36,400
Required to do:
Q1. What is the unit product cost for the month under variable costing?
Q2. Prepare an income statement for the month using the contribution format and the variable costing method.
Q3. Without preparing an income statement, determine the absorption costing net operating income for the month. (Hint: Use the reconciliation method.)