Harper Company,which Has Only One Product,has Provided the Following Data

question 72

Essay

Harper Company,which has only one product,has provided the following data concerning its most recent month of operations:
$\begin{array}{|l|r|}\hline \text { Selling price } & \$ 111 \\\hline \text { Units in beginning inventory } & 400 \\\hline \text { Units produced } & 8,800 \\\hline \text { Units sold } & 8,900 \\\hline \text { Variable costs per unit: } & \\\hline \text { Direct materials } & \$ 34 \\\hline \text { Direct labour } & \$ 37 \\\hline \text { Variable manufacturing overhead } & \$ 3 \\\hline \text { Variable selling and administrative } & \$ 9 \\\hline \text { Fixed costs: } & \\\hline \text { Fixed manufacturing overhead } & \$ 61,600 \\\hline \text { Fixed selling and administrative } & \$ 169,100\\\hline\end{array}$
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.

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Definitions:

Marginal Revenue

The additional income generated from selling one more unit of a product or service.

Demand Curve

A graph showing the relationship between the price of a product and the quantity of the product that consumers are willing and able to purchase at various prices.

Inverse Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded, with price as a function of quantity demanded.

Quantity Demanded

It is the total amount of a good or service that consumers are willing and able to purchase at a specific price level.