4. Lee Corporation, which has only one product, has provided the following data concerning its most
recent month of operations:
Units in beginning inventory
Units in ending inventory
Variable costs per unit:
Variable manufacturing overhead
Variable selling and administrative
Fixed manufacturing overhead
Fixed selling and administrative
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. Assume direct labor is a variable cost.
a. What is the unit product cost for the month under variable costing?
b. What is the unit product cost for the month under absorption costing?
c. Prepare contribution format income statement for the month using variable costing.
d. Prepare income statement for the month using absorption costing.