Question

The Dorset Corporation produces and sells a single product. The following data refer to the year just completed: Beginning inventory Units produced 32,200 26,600 Units sold Selling price per unit Selling and administrative expenses Variable per unit Fixed per year Manufacturing costs: Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead per year 422 19 $452,200 259 56 34 $450,800 Assume that direct labor is a variable cost Required: a. Compute the unit product cost under both the absorption costing and variable costing approaches. b. Prepare an income statement for the year using absorption costing. c. Prepare an income statement for the year using variable costing d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Compute the unit product cost under both the absorption costing and variable costing approaches. Cost Per Unit Absorption costing Variable costing Required B Required A

Answer 1

	Cost per unit
Absorption costing 259+56+34+(450,800/32,200)	363
Variable costing 259+56+34	349