Aaron Company, which has only one product, has provided the following data concerning its most recent month

Question:

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

Selling price ...........................................$90

Units in beginning inventory...................0

Units produced ...................................3,400

Units sold ............................................3,000

Units in ending inventory ......................400

Variable costs per unit:

Direct materials .....................................$21

Direct labor .............................................38

Variable manufacturing overhead .............6

Variable selling and administrative ...........4

Fixed costs:

Fixed manufacturing overhead ..........$54,400

Fixed selling and administrative ............3,000

a. What is the unit product cost for the month under variable costing?

b. What is the unit product cost for the month under absorption costing?

c. The total contribution margin for the month under the variable costing approach is:

d. The total gross margin for the month under the absorption costing approach is:

e. What is the total period cost for the month under the variable costing approach?

f. What is the total period cost for the month under the absorption costing approach?

g. What is the net operating income for the month under variable costing?

h. What is the net operating income for the month under absorption costing?

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes... Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...