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

question 27

Essay

Qabar Company,which has only one product,has provided the following data concerning its most recent month of operations:
$\begin{array}{|l|r|}\hline \text { Selling price } & \$ 110 \\\hline \text { Units in beginning inventory } & 0 \\\hline \text { Units produced } & 4,600 \\\hline \text { Units sold } & 4,200 \\\hline \text { Units in ending inventory } & 400\\\hline \text { Variable costs per unit: } & \\\hline \text { Direct materials } & \$ 46 \\\hline \text { Direct labour } & \$ 28 \\\hline \text { Variable manufacturing overhead } & \$ 5 \\\hline \text { Variable selling and administrative } & \$ 10 \\\hline \text { Fixed costs: } & \\\hline \text { Fixed manufacturing overhead } & \$ 55,200\\ \hline\text { Fixed selling and administrative }&\$ 25,200\\\hline\end{array}$

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:

Share Capital

The total amount of money raised by a company through the sale of shares to investors.

Share Premium

The amount received by a company over and above the par value of its shares when it issues them to shareholders.

Revaluation Surplus

The increase in value of an asset, recognized in the equity section of a company's balance sheet, when its fair market value is higher than its net book value.

Contributed Capital

Funds raised by a company through the issuance of shares to investors, also known as share capital or paid-in capital.