Becker,Inc., produces and sells a unique type of TV Antenna. The company has just opened a new plant to manufactured the antenna, and the following costs and revenue data have been provided for the first month of the plant's operation in the 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 costs per unit $15
Direct labor costs per unit $7
Variable manufacturing overhead cost per unit $2
Fixed manufacturing overhead cost (total) $640,000
Because the new antenna is unique in design, management is anxious to see how profitable it will be and has asked that an income statement be prepared for the month.
Required:
1. Assumes that the company uses absorption costing.
Determine the unit product cost.
Prepare an income statement for the month.
2. Assume that the company uses variable costing
Determine the unit product cost.
Prepare a contribution format income statement for the month.