High Country, Inc., produces and sells many recreational products. The company h

Question

High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:

   

  

    Management is anxious to see how profitable the new camp cot will be and has asked that an income statement be prepared for May.

  

  

         

Prepare an income statement for May.

         

  

         

Prepare a contribution format income statement for May.

High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:

Explanation / Answer

1) Under Absorption costing :

17

b)

2 ) Under Variable costing:

3

b)Under variable costing :

a) Calculation of unit product cost particulars amount ($)'     Direct materials cost per unit

17

Direct labour 9 Variable cost 3 Fixed OH cost(731000/43000) 17 46

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