Question: Maffei Company, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price $138
Units in beginning inventory 0
Units produced 7,400
Units sold 7,200
Units in ending inventory 200
Variable costs per unit:
Direct materials $42
Direct labor $32
Variable manufacturing overhead $1
Variable selling and administrative $8
Fixed costs:
Fixed manufacturing overhead $280,800
Fixed selling and administrative $98,000
Required: a. Prepare an income statement for the month using the contribution format and the variable costing method.
b. Prepare an income statement for the month using the absorption costing method.