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

question 13

Essay

Pabbatti Company,which has only one product,has provided the following data concerning its most recent month of operations:
$\begin{array}{|l|r|}\hline \text { Selling price } & \$ 112 \\\hline \text { Units in beginning inventory } & 500 \\\hline \text { Units produced } & 2,800 \\\hline \text { Units sold } & 2,900 \\\hline \text { Units in ending inventory } & 400\\\hline \text { Variable costs per unit: } & \\\hline \text { Direct materials } & \$ 37 \\\hline \text { Direct labour } & \$ 19 \\\hline \text { Variable manufacturing overhead } & \$ 7 \\\hline \text { Variable selling and administrative } & \$ 5 \\\hline \text { Fixed costs: } & \$ 109,200 \\\hline \text { Fixed manufacturing overhead } & \$ 5,800\\\hline\end{array}$

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)What is the unit product cost for the month under variable costing?
b)Prepare an income statement for the month using the contribution format and the variable costing method.
c)Without preparing an income statement,determine the absorption costing operating income for the month.(Hint: Use the reconciliation method.)

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Definitions:

Social Loafing

The tendency of individuals to expend less effort when working in a group compared to when working alone.

Group Member

An individual who is a part of a collective or team, contributing to the group's objectives and activities.

Group Cohesion

The strength of the relationships linking members of a group to one another and to the group itself.

Bruce Tuckman

An educational psychologist known for his model of group development stages, including forming, storming, norming, performing, and adjourning.