Blue Mountain Products manufactures and sells a variety of camping goods. Recently, the company opened a new factory to manufacture a lightweight, self-standing tent. Cost and sales data for the first month of operations (June 2022) are as follows: 

The tent sells for $150. Management is interested in the opening month’s results and has asked for an income statement. 

Instructions 

a. Assuming the company uses absorption costing: 

1. Calculate the manufacturing cost per unit.

2. Prepare an absorption-costing income statement for the month of June 2022.

b. Assuming the company uses variable costing:

1. Calculate the manufacturing cost per unit.

2. Prepare a variable-costing income statement for the month of June 2022. 

c. Reconcile the difference in net income between the absorption-costing and variable-costing methods.

d. Assuming the company uses throughput costing:

1. Calculate the manufacturing cost per unit.

2. Prepare a throughput-costing income statement for the month of June 2022.

e. Reconcile the difference in net income between the variable-costing and throughput-costing methods.

Transcribed Image Text:

Manufacturing costs Fixed overhead Variable overhead Direct labour Direct materials Beginning inventory Tents produced Tents sold Selling and administrative costs Fixed Variable $200,000 $4 per tent $16 per tent $40 per tent 0 tents 10,000 9,000 $400,000 $6 per tent sold