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In: Accounting

Madison Company, which has only one product, has provided the following data concerning its most recent...

Madison Company, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price

$166

Units in beginning inventory

600

Units produced

13,200

Units sold

13,350

Variable costs per unit:

Direct materials

$51

Direct labour

$56

Variable manufacturing overhead

$5

Variable selling and administrative

$13

Fixed costs:

Fixed manufacturing overhead

$92,400

Fixed selling and administrative

$253,650


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. Compute the total Contribution Margin.
b. Compute the Operating Income under Variable Costing.
c. Prepare a reconciliation from your Variable Costing Operating Income to compute Operating Income under absorption costing.

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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