2 Cost data for said product are given below: Variable costs per unit:

hw 5.2

Cost data for said product are given below:

Variable costs per unit:   Direct materials$5

Direct labor 9 Variable manufacturing overhead 2 Variable selling and administrative 2 Total variable cost per unit$18 Fixed costs per month:   Fixed manufacturing overhead$120,000 Fixed selling and administrative 163,000 Total fixed cost per month$283,000

The product sells for $51 per unit. Production and sales data for July and August, the first two months of operations, are as follows:

Units

Produced Units

SoldJuly 30,000   26,000 August 30,000   34,000

The company’s Accounting Department has prepared absorption costing income statements for July and August as presented below:

July AugustSales$1,326,000  $1,734,000 Cost of goods sold 520,000   680,000 Gross margin$806,000  $1,054,000 Selling and administrative expenses 215,000   231,000 Net operating income$591,000  $823,000

1. 
   determine the unit product cost under absorption costing and variable costing:
   

a. absorption costing unit product cost:

b. variable costing unit product cost:

2.prepare contribution format variable costing income statements for July and August: