Uhf antennas inc produces and sells a unique television

Question

UHF Antennas, Inc., produces and sells a unique television antenna. The company has just opened a new plant to manufacture the antenna, and the following cost and revenue data have been reported for the first month of the new plant's operation:

Beginning inventory			0
Units produced			35,000
Units sold			30,000
Sales price per unit		$	50
Selling and administrative expenses:
Variable per unit		$	2
Fixed (total)		$	360,000
Manufacturing costs:
Direct materials cost per unit		$	9
Direct labor cost per unit		$	8
Variable manufacturing overhead cost per unit		$	3
Fixed manufacturing overhead (total)		$	350,000

 

Management is anxious to see how profitable the new antenna will be and has asked that an income statement be prepared for the month. Assume that direct labor is a variable cost.

 

Required:
a.	Assuming that the company uses absorption costing, compute the unit product cost and prepare an income statement. (Input all amounts as positive values.)

 

Unit product cost

$

 

Absorption costing income statement
(Click to select)Direct materialsSalesSelling and administrative expensesManufacturing overheadFixed expenses	$
(Click to select)Manufacturing overheadDirect materialsFixed expensesSelling and administrative expensesCost of goods sold
(Click to select)Gross lossGross margin
(Click to select)Selling and administrative expensesSalesManufacturing overheadDirect materialsCost of goods sold
(Click to select)Net operating incomeNet operating loss	$

 

b.	Assuming that the company uses variable costing, compute the unit product cost and prepare an income statement. (Input all amounts as positive values.)

 

Unit product cost

$

 

Variable costing income statement
(Click to select)Manufacturing overheadFixed expensesDirect materialsVariable cost of good soldSales		$
Variable expenses:
(Click to select)Fixed manufacturing overheadFixed selling and administrative expensesVariable cost of goods soldVariable selling and administrative expensesSales	$
(Click to select)Variable selling and administrative expensesSalesFixed manufacturing overheadFixed selling and administrative expensesVariable cost of goods sold
Contribution margin
Fixed expenses:
(Click to select)Variable cost of goods sold Sales Fixed selling and administrative expenses Fixed manufacturing overhead Variable selling and administrative expenses
(Click to select)Fixed manufacturing overhead Sales Variable selling and administrative expenses Fixed selling and administrative expenses Variable cost of goods sold
(Click to select)Net operating income Net operating loss		$

 

c.	Reconcile the absorption costing and variable costing net operating income figures in (a) and (b) above.(Input all amounts as positive values.)
Net operating income under variable costing		$
(Click to select)Add fixed manufacturing overhead deferred in inventory under absorption costing Less fixed manufacturing overhead deferred in inventory under absorption costing
Net operating income under absorption costing		$