Sandi Scott obtained a patent on a small electronic device and organized Scott Products Inc. to produce and sell the device. During the first month of
operations the device was very well received on the market so Ms. Scott looked forward to a healthy profit. For this reason she was surprised to see a loss
for the month on her income statement. This statement was prepared by her accounting service which takes great pride in providing its clients with timely
financial data. The statement follows:

Ms. Scott is discouraged over the loss shown for the month particularly because she had planned to use the statement to encourage investors to
purchase stock in the new company. A friend who is a CPA insists that the company should be using absorption costing rather than variable
costing. He argues that if absorption costing had been used the company would probably have reported a profit for the month.

Selected cost data relating to the product and to the first month of operations follow:

Compute the unit product cost under absorption costing. (Round your intermediate and final answers to 2 decimal
places.)

Redo the company%u2019s income statement for the month using absorption costing. (Input all amounts as positive values
except losses which should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places. Round your final answers to
the nearest whole number.)
(Click to select) Cost of goods sold Selling and administrative expenses Net operating income (loss) Gross margin Sales (Click to select) Sales Selling and administrative expenses Net operating income (loss) Cost of goods sold Gross margin (Click to select) Gross margin Contribution margin (Click to select) Selling and administrative expenses Sales Gross margin Net operating income (loss) Cost of goods sold (Click to select) Net operating income Net operating loss
Reconcile the variable and absorption costing net operating income (loss) figures. (Loss amounts and amounts to be
deducted should be indicated with a minus sign. Round your intermediate calculations to 2 decimal places. Round your final answers to the
nearest whole number.)
(Click to select) Add Deduct : (Click to select) Fixed manufacturing overhead cost deferred in inventory Fixed manufacturing overhead cost released from inventory
During the second month of operations the company again produced 24000 units but sold 27000 units. (Assume no change in total fixed costs.)

Prepare a contribution format income statement for the month using variable costing. (Input all amounts as positive values
except losses which should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places. Round your final answers to
the nearest whole number.)
(Click to select) Fixed manufacturing overhead Fixed selling and administrative expense Variable selling and administrative expense Contribution margin Variable cost of goods sold Sales Net operating income (loss) (Click to select) Sales Fixed selling and administrative expense Net operating income (loss) Contribution margin Variable cost of goods sold Fixed manufacturing overhead Variable selling and administrative expense (Click to select) Variable cost of goods sold Sales Net operating income (loss) Fixed manufacturing overhead Contribution margin Variable selling and administrative expense Fixed selling and administrative expense (Click to select) Gross margin Contribution margin (Click to select) Net operating income (loss) Contribution margin Sales Fixed manufacturing overhead Fixed selling and administrative expense Variable cost of goods sold Variable selling and administrative expense (Click to select) Net operating income (loss) Sales Variable cost of goods sold Variable selling and administrative expense Contribution margin Fixed selling and administrative expense Fixed manufacturing overhead (Click to select) Net operating loss Net operating income
Prepare an income statement for the month using absorption costing. (Input all amounts as positive values except losses
which should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places. Round your final answers to the nearest
whole number.)
(Click to select) Gross margin Sales Net operating income (loss) Cost of goods sold Selling and administrative expenses (Click to select) Cost of goods sold Sales Gross margin Net operating income (loss) Selling and administrative expenses (Click to select) Contribution margin Gross margin (Click to select) Net operating income (loss) Cost of goods sold Sales Gross margin Selling and administrative expenses (Click to select) Net operating income Net operating loss
Reconcile the variable costing and absorption costing net operating incomes. (Loss amounts and amounts to be deducted
should be indicated with a minus sign. Round your intermediate calculations to 2 decimal places. Round your final answers to the nearest whole
number.)
(Click to select) Deduct Add : (Click to select) Fixed manufacturing overhead cost released from inventory Fixed manufacturing overhead cost deferred in inventory