Required Information Exercise 19-9 Income statement under absorption costing and variable costing LO P1, P2 (The...

1a. Product cost per unit
Per unit product cost using:	Absorption costing
Direct material per unit	$60
Direct labor per unit	$22
Variable overhead per unit	$8
Fixed overhead per unit                                                                          [Fixed overhead ÷ Number of units produced = $552,000 ÷ 46,000 units]	$12
Total Cost per unit	$102

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COOL SKY
Absorption Costing Income Statement
Sales             [38,000 units x $140 per unit]		$5,320,000
Less: Cost of goods Sold
Direct materials     [38,000 units x $60]	$2,280,000
Direct labor            [38,000 units x $22]	$836,000
Variable overhead cost   [38,000 units x $8]	$304,000
Fixed overhead cost       [38,000 units x $12]	$456,000
Cost of goods sold		$3,876,000
Gross Margin           [Sales - Cost of goods sold]		$1,444,000
Selling, General, and Administrative expenses
Variable selling and administrative expenses [38,000 units x $10]	$380,000
Fixed selling and administrative cost	$110,000
		$490,000
Net Income (loss)        [$1,444,000 - $490,000]		$954,000

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2a. Product cost per unit
Per unit product cost using:	Variable Costing
Direct material per unit	$60
Direct labor per unit	$22
Variable overhead per unit	$8
Cost per unit	$90

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COOL SKY
Variable Costing Income Statement
Sales             [38,000 units x $140 per unit]		$5,320,000
Less: Variable Costs
Variable Production Costs                               [38,000 units x $90]	$3,420,000
Variable Selling and administrative expenses [38,000 x $10]	$380,000
Total Variable Costs		$3,800,000
Contribution Margin           [Sales - Total Variable Costs]		$1,520,000
Less: Fixed expenses
Fixed Overhead costs	$552,000
Fixed selling and administrative cost	$110,000
Total fixed expenses		$662,000
Net Income (loss)       [$1,520,000 - $662,000]		$858,000