Find below the income statement of a company manufacturing $4$ YOU crop.

The data shown is related to the month $1.$ We are about to start the second month, but there is a big snowstorm that is blocking transportation. We do have enough raw materials to produce during this month, and as the workers live nearby $,$ they can also access the production plant.

Our CEO has decided to continue with production, even though we will not be able to sell and devilled until month three. Please explain in detail which of the cost lines are product cost and which are period cost. Show a forecast of the income statement for month $2.$sales $10\mathrm{.}000$

Direct materials $5\mathrm{.}000$

Direct labor $2\mathrm{.}000$

Manufacturing overhead $1\mathrm{.}000$

Depreciation $200$

Utilities $500$

Maintenance $300$

Contribution margin $2\mathrm{.}000$

$\%$CM $20\%$

G&A $300$

EBIT $1\mathrm{.}700$

Answer rating: 100% (QA)

Product Costs vs Period Costs in Month 2 Forecast Product Costs Direct Materials 5000 These are used ... View the full answer