Question

Montier Corporation produces one product. Its cost includes direct materials ($10 per unit), direct labor ($8 per unit), variable overhead ($5 per unit), fixed manufacturing ($225,000), and fixed selling and administrative ($30,000). In October 2017, Montier produced 25,000 units and sold 20,000 at $50 each.

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(a)

Prepare an absorption costing income statement.

MONTIER CORPORATION
Income Statement

For the Month Ended October 31, 2017
October 31, 2017
For the Quarter Ended October 31, 2017
(Absorption Costing)

Cost of Goods Manufactured
Cost of Good Sold
Sales
Contribution Margin
Fixed Costs
Cost of Goods Available for Sale
Net Income / (Loss)
Selling and Administrative Expenses
$

Cost of Good Sold
Cost of Goods Manufactured
Selling and Administrative Expenses
Cost of Goods Available for Sale
Sales
Contribution Margin
Fixed Costs
Net Income / (Loss)

Sales
Gross profit
Cost of Goods Available for Sale
Cost of Good Sold
Fixed Costs
Cost of Goods Manufactured
Net Income / (Loss)
Selling and Administrative Expenses

Selling and Administrative Expenses
Contribution Margin
Selling and administrative expenses
Cost of Goods Manufactured
Cost of Good Sold
Net Income / (Loss)
Sales
Cost of Goods Available for Sale

Sales
Cost of Good Sold
Selling and Administrative Expenses
Contribution Margin
Fixed Costs
Net Income / (Loss)
Cost of Goods Manufactured
Cost of Goods Available for Sale
$

Answer 1

MONTIER CORPORATION

Income Statement

For the Month Ended October 31, 2017

Absorption Costing

Sales (20000*50)	1000000
Cost of goods sold (20000*32)	640000
Gross profit	360000
Fixed selling and administrative expenses	30000
Net income	330000

Unit cost

Direct materials	10
Direct labor	8
Variable manufacturing overhead	5
Fixed manufacturing overhead (225000/25000)	9
Manufacturing cost per unit	32