UHF Antennas, Inc., produces and sells a unique television antenna. The company

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:

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.

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

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

Reconcile the absorption costing and variable costing net operating income figures in (a) and (b) above. (Input all amounts as positive values.)

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

Explanation / Answer

sales = 1500000

less cogs=(950000)

gross margin=550000

less selling and general exp = (420000)

net operating incom=13000

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