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PROBLEM SOLVING. Write your answer in the space provided or at the back of this paper.
1) Redstone Corporation produces a single product and has the following cost structure:
Required:
a. Compute the unit product cost under absorption costing. Show your work!
b. Compute the unit product cost under variable costing. Show your work!
2) Nelson Corporation, which has only one product, has provided the following data concerning its
most recent month of operations:
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Selling price $84
Fixed costs:
Fixed manufacturing overhead $38,000
Fixed selling and administrative $21,000
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. Prepare a contribution format income statement for the month using variable costing.
b. Prepare an income statement for the month using absorption costing.
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Answer Key
Testname: VARIABLE COSTING SEATWORK
1) a. Absorption costing:
b. Variable costing:
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Answer Key
Testname: VARIABLE COSTING SEATWORK
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Answer Key
Testname: VARIABLE COSTING SEATWORK