A Addison, Inc. makes a single product, an indoor fireplace. Data for last year is as follo $420 - Selling price per fireplace - Manufacturing costs: Variable per unit produced: Direct materials $135 Direct labor $43 $37 Variable manufacturing overhead eFixed manufacturing overhead per year 0 Selling and administrative expenses: 1 Variable per unit sold 2 Fixed per year 13 14 Units in beginning inventory 15 Units produced during the year 16 Units sold during the year 17 18 Use the data to answer the following. $210,000 $45 $190,000 5,000 4,500 19

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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1 Addison, Inc. makes a single product, an indoor fireplace. Data for last year is as follows:
2
$420
3 Selling price per fireplace
4 Manufacturing costs:
Variable per unit produced:
6.
Direct materials
$135
Direct labor
$43
8.
$37
Variable manufacturing overhead
Fixed manufacturing overhead per year
10 Selling and administrative expenses:
11 Variable per unit sold
12 Fixed per year
9.
$210,000
$45
$190,000
13
14 Units in beginning inventory
15 Units produced during the year
16 Units sold during the year
5,000
4,500
17
18 Use the data to answer the following.
19
A
20 1. Assume the company uses variable costing:
21
22 Compute the unit product cost for one fireplace
23
24 Prepare a contribution margin income statement for the year
25
26 Sales
27 Variable expenses:
28 Variable cost of goods sold
29 Variable selling and administrative expenses
30 Contribution margin
31 Fixed expenses:
32 Fixed manufacturing overhead
33 Fixed selling and administrative expenses
34 Net operating income
35
36 Compute the number of fireplaces required to breakeven
37
38 2. Assume the company uses absorption costing:
39
40 Compute the unit product cost for one fireplace
41
42 Prepare an income statement for the year
43
44 Sales
45 Cost of goods sold
46 Gross margin
47 Selling and administrative expenses
48 Net operating income
49
Transcribed Image Text:A 1 Addison, Inc. makes a single product, an indoor fireplace. Data for last year is as follows: 2 $420 3 Selling price per fireplace 4 Manufacturing costs: Variable per unit produced: 6. Direct materials $135 Direct labor $43 8. $37 Variable manufacturing overhead Fixed manufacturing overhead per year 10 Selling and administrative expenses: 11 Variable per unit sold 12 Fixed per year 9. $210,000 $45 $190,000 13 14 Units in beginning inventory 15 Units produced during the year 16 Units sold during the year 5,000 4,500 17 18 Use the data to answer the following. 19 A 20 1. Assume the company uses variable costing: 21 22 Compute the unit product cost for one fireplace 23 24 Prepare a contribution margin income statement for the year 25 26 Sales 27 Variable expenses: 28 Variable cost of goods sold 29 Variable selling and administrative expenses 30 Contribution margin 31 Fixed expenses: 32 Fixed manufacturing overhead 33 Fixed selling and administrative expenses 34 Net operating income 35 36 Compute the number of fireplaces required to breakeven 37 38 2. Assume the company uses absorption costing: 39 40 Compute the unit product cost for one fireplace 41 42 Prepare an income statement for the year 43 44 Sales 45 Cost of goods sold 46 Gross margin 47 Selling and administrative expenses 48 Net operating income 49
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