Question: Maffei Company, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price $138

Units in beginning inventory 0

Units produced 7,400

Units sold 7,200

Units in ending inventory 200

Variable costs per unit:

Direct materials $42

Direct labor $32

Variable manufacturing overhead $1

Variable selling and administrative $8

Fixed costs:

Fixed manufacturing overhead $280,800

Fixed selling and administrative $98,000

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.