Nelter Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 120 Units in beginning inventory 330 Units produced 6,010 Units sold 6,090 Units in ending inventory 250 Variable costs per unit: Direct materials $ 42 Direct labor $ 24 Variable manufacturing overhead $ 2 Variable selling and administrative expense $ 17 Fixed costs: Fixed manufacturing overhead $ 108,180 Fixed selling and administrative expense $ 97,440 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. Required Questions: a. Prepare a contribution format income statement for the month using variable costing. b. Prepare an income statement for the month using absorption costing.
Nelter Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 120 Units in beginning inventory 330 Units produced 6,010 Units sold 6,090 Units in ending inventory 250 Variable costs per unit: Direct materials $ 42 Direct labor $ 24 Variable manufacturing overhead $ 2 Variable selling and administrative expense $ 17 Fixed costs: Fixed manufacturing overhead $ 108,180 Fixed selling and administrative expense $ 97,440 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. Required Questions: a. Prepare a contribution format income statement for the month using variable costing. b. Prepare an income statement for the month using absorption costing.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Nelter Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
| Selling price | $ | 120 |
| Units in beginning inventory | 330 | |
| Units produced | 6,010 | |
| Units sold | 6,090 | |
| Units in ending inventory | 250 | |
| Variable costs per unit: | ||
| Direct materials | $ | 42 |
| Direct labor | $ | 24 |
| Variable manufacturing |
$ | 2 |
| Variable selling and administrative expense | $ | 17 |
| Fixed costs: | ||
| Fixed manufacturing overhead | $ | 108,180 |
| Fixed selling and administrative expense | $ | 97,440 |
The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month.
Required Questions:
a. Prepare a contribution format income statement for the month using variable costing.
b. Prepare an income statement for the month using absorption costing.
*See attached images for formatting of income statements
Transcribed Image Text:Nelter Corporation, which has only one product, has provided the following data concerning its most recent month of
operations:
Selling price
Units in beginning inventory
Units produced
Units sold
Units in ending inventory
Variable costs per unit:
Direct materials
Direct labor
Variable manufacturing overhead
Variable selling and administrative
2$
120
330
6,010
6,090
250
2$
$
$
42
24
2
$
17
expense
Fixed costs:
Fixed manufacturing overhead
Fixed selling and administrative
$108,180
$ 97,440
expense
The company produces the same number of units every month, although the sales in units vary from month to month.
The company's variable costs per unit and total fixed costs have been constant from month to month.
Required:
a. Prepare a contribution format income statement for the month using variable costing.
b. Prepare an income statement for the month using absorption costing.
Complete this question by entering your answers in the tabs below.
Required Required
A
В
Prepare a contribution format income statement for the month using variable costing.
Variable Costing Income Statement
Variable expenses:
Fixed expenses:
Transcribed Image Text:Nelter Corporation, which has only one product, has provided the following data concerning its most recent month of
operations:
Selling price
Units in beginning inventory
Units produced
Units sold
Units in ending inventory
Variable costs per unit:
Direct materials
120
330
6,010
6,090
250
42
Direct labor
24
Variable manufacturing overhead
Variable selling and administrative
2
17
expense
Fixed costs:
Fixed manufacturing overhead
Fixed selling and administrative
$108,180
$ 97,440
expense
The company produces the same number of units every month, although the sales in units vary from month to month.
The company's variable costs per unit and total fixed costs have been constant from month to month.
Required:
a. Prepare a contribution format income statement for the month using variable costing.
b. Prepare an income statement for the month using absorption costing.
Complete this question by entering your answers in the tabs below.
Required Required
A
B
Prepare an income statement for the month using absorption costing.
Absorption Costing Income Statement
%24
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