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Calculate the product cost and prepare an income statement under variable costing. Bob's Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2022, the company incurred the following costs: E8.19 (LO 1 Variable cost per unit Direct materials $6.50 Direct labour 2.75 Variable manufacturing overhead 5.75 Variable selling and administrative expenses 3.90 Fixed costs for year Fixed manufacturing overhead $285,000 Fixed selling and administrative expenses 240,100 Bob's Company sells the fishing lures for $25. During 2022, the company produced 95,000 lures and sold 80,000. Instructions a. Assuming the company uses variable costing, calculate Bob's manufacturing cost per unit for 2022. b. Prepare a variable-costing income statement for 2022. Calculate the product cost and prepare an income statement under absorption costing.

Calculate the product cost and prepare an income statement under variable costing. Bob's Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2022, the company incurred the following costs: E8.19 (LO 1 Variable cost per unit Direct materials $6.50 Direct labour 2.75 Variable manufacturing overhead 5.75 Variable selling and administrative expenses 3.90 Fixed costs for year Fixed manufacturing overhead $285,000 Fixed selling and administrative expenses 240,100 Bob's Company sells the fishing lures for $25. During 2022, the company produced 95,000 lures and sold 80,000. Instructions a. Assuming the company uses variable costing, calculate Bob's manufacturing cost per unit for 2022. b. Prepare a variable-costing income statement for 2022. Calculate the product cost and prepare an income statement under absorption costing.

FINANCIAL ACCOUNTING
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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Calculate the product cost and prepare an income statement under variable costing. Bob's Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2022, the company incurred the following costs: E8.19 (LO 1 Variable cost per unit Direct materials $6.50 Direct labour 2.75 Variable manufacturing overhead 5.75 Variable selling and administrative expenses 3.90 Fixed costs for year Fixed manufacturing overhead $285,000 Fixed selling and administrative expenses 240,100 Bob's Company sells the fishing lures for $25. During 2022, the company produced 95,000 lures and sold 80,000. Instructions a. Assuming the company uses variable costing, calculate Bob's manufacturing cost per unit for 2022. b. Prepare a variable-costing income statement for 2022. Calculate the product cost and prepare an income statement under absorption costing.
Transcribed Image Text:Calculate the product cost and prepare an income statement under variable costing. Bob's Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2022, the company incurred the following costs: E8.19 (LO 1 Variable cost per unit Direct materials $6.50 Direct labour 2.75 Variable manufacturing overhead 5.75 Variable selling and administrative expenses 3.90 Fixed costs for year Fixed manufacturing overhead $285,000 Fixed selling and administrative expenses 240,100 Bob's Company sells the fishing lures for $25. During 2022, the company produced 95,000 lures and sold 80,000. Instructions a. Assuming the company uses variable costing, calculate Bob's manufacturing cost per unit for 2022. b. Prepare a variable-costing income statement for 2022. Calculate the product cost and prepare an income statement under absorption costing.
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