The Cost Accountant for the Friendly Manufacturing Company Has Provided

Essay

The cost accountant for the Friendly Manufacturing Company has provided you with the following information for the month of July:
$$\begin{array} { l c c } & & \text { Total Fixed } \\&\text { Variable costs Per unit } & \text { Costs } \\\text { Direct labor } & 27.50 \\\text { Direct materials } &84.75 & \\\text { Manufacturing overhead } & 14.25 & \$ 120,000 \\\text { Marketing costs } &5.30 & 50,000\\\text { Administrative costs } &2.90 & 75,000 \\\text { Selling price } & 210.00\end{array}$$
Required:
Assuming the company produced and sold 5,000 units, and there were no units in inventory on July 1, prepare the following income statements for the month of July:
(a) Contribution margin income statement.
(b) Gross margin income statement.