7. Profit and reconciliation of profit. Maggie has just obtained a patent on a small electronic device and organized Maggie Products, Ic., in order to produce and sell the device. During the first month of operations, the device was very well received on the market and a statement of profit or loss shown below was prepared. The President was discouraged over the loss shown on the profit or loss statement. Maggie Products, Inc. Statement of ProfIt or Loss First Month P 200,000 Sales (40,000 units). Less variable expenses: P 80,000 Cost of goods sold (*) Selling and administrative Contribution margin Less fixed expeńses: 30,000 110.000 90,000 Manufacturing overhead Selling and administrative Net loss 75,000 20.000 95,000 P (5.000) (* consists of direct materials, direct labor and variable overhead.) Other datą: Ünits produced Units sold Variable costs per unit: Direct materials 50,000 40,000 P 1.00 0.80 Direct labor 0.20 Manufacturing overhead Selling and administrative expenses 0.90

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