MountainAir Company has the following selected data for the past year: Units sold during year                                  30,000 Units produced during year                          45,000 Units in ending inventory                              15,000 Variable manufacturing cost per unit                4.50 Fixed manufacturing overhead (in total)        20,250 Selling price per unit                                        12.00 Variable selling and administrative expense per unit          1.00 Fixed selling and administrative expenses (in total)           4,000 a). Prepare an income statement for last year using absorption (full) b)Calculate the total value of the ending inventory using absorption c)Prepare an income statement for last year using variable costing (i.e., contribution margin income statement). d)Calculate the total value of the ending inventory using variable costing. SHOW YOUR WORK AND ANSWER ALL PARTS TO GET POINTS PLEASE Solution a) Income Statement for last year using Absorption Costing: _____________________________________________________________ Sales (30,000 units .

1. MountainAir Company has the following selected data for the past year:
Units sold during
year                                 30,000
Units produced during year                          45,000
Units in ending inventory                            Â
15,000
Variable manufacturing cost per unit               4.50
Fixed manufacturing overhead (in total)Â Â Â Â Â Â Â 20,250
Selling price per
unit                                     Â
  12.00
Variable selling and administrative expense per unit         1.00
Fixed selling and administrative expenses (in total)Â Â Â Â Â Â Â Â Â Â 4,000
a). Prepare an income statement for last year using absorption (full)
b)Calculate the total value of the ending inventory using absorption
c)Prepare an income statement for last year using variable costing (i.e., contribution margin
income statement).
d)Calculate the total value of the ending inventory using variable costing.
SHOW YOUR WORK AND ANSWER ALL PARTS TO GET POINTS PLEASE
Solution
a) Income Statement for last year using Absorption Costing:

2. _____________________________________________________________
Sales (30,000 units