PRINTER VERSION BACK NEXT. Question 2 Fresh Air Products manufactures and sells a variety of camping products. Recently the company opened a new plant to manufacture a deluxe portable cooking unit. Cost and sales data for the first month of operations are shown below: Beginning inventory O units Units produced 10,900 Units sold 9,000 Manufacturing costs Fixed overhead $130,800 Variable overhead $4 per unit Direct labour $9 per unit Direct material $25 per unit Selling and administrative costs Fixed $199,500 Variable $4 per unit sold The portable cooking unit sells for 5111, Management is interested in the opening month's results and has asked for an income statement. (0) Your answer is correct Assuming the company uses variable costing 1. Calculate the manufacturing cost per unit. Manufacturing cost 38 per unit the first month or operation. Fresh Air Products Income Statement-Variable Costing For the first month of operations Sales 999000 Less Variable costs Variable cost of goods sold 342000 SO Variable selling and administrative expenses 36000 Total variable costs 378000 Contribution margin 621000 Less Fixed costs Fixed manufacturing overhead 130800 > Fixed selling and administrative expenses 199500 Total fixed costs 330300 Operating income efore tax 290700 SHOW SOLUTION (b) Reconcile the difference in net income between the absorption-costing and variable-costing methods. Variable costing operating income Fixed manufacturing overhead costs deferred in ending inventory Absorption costing operating income LINK TO TEXT LINK TO TEXT Attems 18 P