P.S.:

Module 15 is just a normal high-low method.

LOG P18-43. Variable and Absorption Costing with High-Low Cost Estimation and CVP Analysis Including Taxes Presented are the Charger Company's functional income statements for January and February. CHARGER COMPANY Functional (Absorption Costing) Income Statements For the Months of January and February January February Production and sales 35,000 40,000 Sales Revenue Cost of goods manufactured and sold Gross profit. . General and administrative expenses Net operating income Income taxes at 0.21 Net income after taxes $2,450,000 (1,470,000) 980,000 (650,000) 330,000 (69,300 $ 260,700 $2,800,000 (1,540,000) 1,260,000 (650,000) 610,000 (128,100) $ 481,900 Required a. Using the high-low method (see Module 15), develop a cost-estimating equation for total monthly manufacturing costs. b. Determine Charger Company's monthly break-even point. c. Determine the unit sales required to earn a monthly after-tax income of $600,000. d. Prepare a January contribution income statement using variable costing. e. If the January net income amounts differ using absorption and variable costing, explain why. If they are identical, explain why