Problem 8-14 Absorption and Variable Costing; Production Constant, Sales Fluctuate [LO1, LO2, LO3, L04] Leander Office Products Inc. produces and sells small storage and organizational products for office use. During the first month of operations, the products sold well. Andrea Leander, the owner of the company, was surprised to see a loss for the month on her income statement. This statement was prepared by a local bookkeeping service recommended to her by her bank manager. The statement follows: LEANDER OFFICE PRODUCTS INC. Check my work Incoer Statement Sales (44,400 units) variable expenses: Variable cost of goods sold Variable selling and administrative expenses Contribution margin Fixed expenses Fixed sanufacturing overhead Fixed selling and administrative expenses Operating loss $244,200 $110,556 39,960 150-516 93,684 90,365 19,002 109,457 45.773) "Consists of direct materials, direct labour, and variable manufacturing overhead Leender is discouraged over the loss shown for the month, particularly since she had planned to use the statement to encourage investors to purchase shares to the new company. A friend who is an accountant insists that the company should be using absorption 42 PM