Problem 6. Italia Espresso Machina Inc. produces a single product. Data conce operations last year appear...

 

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Problem 6. Italia Espresso Machina Inc. produces a single product. Data conce operations last year appear below: Units in beginning inventory Units produced Units sold Selling price per unit Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs in total: Fixed manufacturing overhead Fixed selling and administrative 0 2,000 1,900 $100 $30 $10 $5 $2 $40,000 $60,000 oncerning the company's Required: a. Compute the unit product cost under both absorption and variable costing. b. Prepare an income statement for the year using absorption costing. c. Prepare a contribution format income statement for the year using variable costing. d. Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year. Problem 6. Italia Espresso Machina Inc. produces a single product. Data conce operations last year appear below: Units in beginning inventory Units produced Units sold Selling price per unit Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs in total: Fixed manufacturing overhead Fixed selling and administrative 0 2,000 1,900 $100 $30 $10 $5 $2 $40,000 $60,000 oncerning the company's Required: a. Compute the unit product cost under both absorption and variable costing. b. Prepare an income statement for the year using absorption costing. c. Prepare a contribution format income statement for the year using variable costing. d. Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year.