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nment #7 (one) x (— G I G) eztomheducationcomfhmtpx Leander Office Products inc. pro-dum and selh small storage and organizational products for ofl’llc use.During the first month at operations. the products sold well. Andrea Leander, the ownerof the company,was surprised to see a loss forthe month on her inmme statement. This statement was prepared by a localbookkeeping service recommended to her by her bank manager‘ The slalernenl follows: LEANDER OFFICE PRODUCTS INC.Income Statement Sales [41,409 units) $264360Variable expenses: Variable cost at goods sold” $125,534 Variable selling and administrative expenses 43,438 175,122Contribution margin 39,833Fixed expenses: Fixed manufacturing overhead 90.325 Fixed selling and administrative expenses 14,490 105,313Operating loss 3 (15,430) “Consists of direct materials. direct labour, and variable manufacturing overhead. Leander is discouraged over the log shown tor the month. particularly since she had planned to use thestatement to encourage investols to purchase stock in the new company. Afriend who is an accountantinsiss that the company should be using absorption costing rather than variable ousting. He argues that ii’absorption costing had been used, the company would probably have reported a profit For the month. Selected met data relating to the product and to the first month of operations follow: Units produced 52.250Units sold 41,400Variable costs per unit:Dired materials 3 1.47Direct labour $ 1.22Variable manufacturing overhead $ 0.3?Variable selling and administrative expenses $ 1.17 Required:1. Complete the following: 5. Compute the unit product cost under absorption ousting (Round your answer to 2 decimal places}
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