Italia Espresso Machina Inc

Essay

Italia Espresso Machina Inc. produces a single product. Data concerning the company's operations last year appear below: Required:
a. Compute the unit product cost under both absorption and variable costing.
b. Prepare an income statement for the year using absorption costing.
c. Prepare a contribution format income statement for the year using variable costing.
d. Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year.