A company has the same variable costs per unit, the same fixed costs in total and the same selling price in all four years referenced in the following table. Production and Sales Volume in Units Units Year 1 Year 2 Year 3 Year 4 Production Units6,00010,00010,00010,800 Sales Units 4,00010,50011,000 11,000 1. Using the information provided, if we used Variable Costing for all four years which year(s) would most likely have the highest Net Operating Income? Multiple Choice Years 3 and 4 would have the same Net Operating Income and it would be the highest of all four years. Year 2 Year 4 Year 3 2. Using the information provided, in what year is the Product Unit Čost using Absorption Costing the largest? Multiple Choice Year 1 Year 3 Year 4 Year 2

A company has the same variable costs per unit, the same fixed costs in total and the same selling price in all four years referenced in the following table. Production and Sales Volume in Units Units Year 1 Year 2 Year 3 Year 4 Production Units6,00010,00010,00010,800 Sales Units 4,00010,50011,000 11,000 1. Using the information provided, if we used Variable Costing for all four years which year(s) would most likely have the highest Net Operating Income? Multiple Choice Years 3 and 4 would have the same Net Operating Income and it would be the highest of all four years. Year 2 Year 4 Year 3 2. Using the information provided, in what year is the Product Unit Čost using Absorption Costing the largest? Multiple Choice Year 1 Year 3 Year 4 Year 2

Name: A company has the same variable costs perunit, the same fixed costs i
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Description: A company has the same variable costs perunit, the same fixed costs in total and thesame selling price in all four years referencedin the following table.Production and Sales Volume in UnitsUnitsYear 1 Year 2 Year 3 Year 4Production Units6,00010,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following data are available for MR SANJO Corp. during the past months:
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! Required information [The following information applies to the questions displayed below.] O'Brien Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. During its first year of operations, O'Brien produced 98,000 units and sold 74,000 units. During its second year of operations, it produced 80,000 units and sold 99,000 units. In its third year, O'Brien produced 90,000 units and sold 85,000 units. The selling price of the company's product is $78 per unit. Req 4A 4. Assume the company uses absorption costing and a LIFO inventory flow assumption (LIFO…
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