Variable and absorption

Super Products, Inc. uses a standard costing system. For June and July the following costs were budgeted and incurred: Manufacturing costs ut of Variable costs per unit: Direct materials $ 30 Direct labor $ 42 Variable overhead $ 6 Fixed overhead costs: (monthly total) $300,000 Selling & Administrative Costs: Variable costs per unit sold $22 Fixed (monthly total) $175,000 The budgeted denominator level used to determine the fixed overhead allocation rate was 5,000 units for each month. For July, the following information was available: Inventory July 1 1,000 units Units produced in July 4,000 units Units sold in July 3,200 units Selling price per unit $300 Assume there are no price, efficiency, or rate (spending) variances. Question #2 - Prepare a numerical reconciliation in which you calculate the variable costing operating income for the month of July. An income statement is not required. (Reconcile mathematically, the difference between the two operating income figures). Label all calculations. (2 marks) J ABIG X FA Prison Home End 8