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

question 58

Essay

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

MPS

The marginal propensity to save, which is the proportion of an increase in income that is saved rather than spent on consumption.

Disposable Income

Funds at households' discretion for savings and spending pursuits after the deduction of income taxes.

Autonomous Consumption

The minimum level of consumption that would still occur even if a consumer had no income, based on basic needs and obligations.

MPS

Marginal Propensity to Save, which is the fraction of an increase in income that is not spent on an increase in consumption.