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 $ 29 Direct labor $ 17 Variable manufacturing overhead $ 5 Variable selling and administrative $ 2 Fixed costs per year: Fixed manufacturing overhead $ 540,000 Fixed selling and administrative expenses $ 110,000 During its first year of operations, O'Brien produced 91,000 units and sold 77,000 units. During its second year of operations, it produced 82,000 units and sold 91,000 units. In its third year, O'Brien produced 83,000 units and sold 78,000 units. The selling price of the company's product is $79 per unit. Required: 1. Assume the
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 $ 29 Direct labor $ 17 Variable manufacturing overhead $ 5 Variable selling and administrative $ 2 Fixed costs per year: Fixed manufacturing overhead $ 540,000 Fixed selling and administrative expenses $ 110,000 During its first year of operations, O'Brien produced 91,000 units and sold 77,000 units. During its second year of operations, it produced 82,000 units and sold 91,000 units. In its third year, O'Brien produced 83,000 units and sold 78,000 units. The selling price of the company's product is $79 per unit. Required: 1. Assume the
Chapter1: Financial Statements And Business Decisions
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![[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 $ 29 Direct
labor $ 17 Variable manufacturing overhead $
5 Variable selling and administrative $2 Fixed
costs per year: Fixed manufacturing overhead
$ 540,000 Fixed selling and administrative
expenses $ 110,000 During its first year of
operations, O'Brien produced 91,000 units
and sold 77,000 units. During its second year
of operations, it produced 82,000 units and
sold 91,000 units. In its third year, O'Brien
produced 83,000 units and sold 78,000 units.
The selling price of the company's product is
$79 per unit. Required: 1. Assume the
company uses variable costing and a FIFO
inventory flow assumption (FIFO means first-
in first-out. In other words, it assumes that the
oldest units in inventory are sold first):
Compute the unit product cost for Year 1, Year
2, and Year 3. Prepare an income statement
for Year 1, Year 2, and Year 3.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F349709f6-3e99-49ce-9384-9f2b79e0bb19%2Fda7c7572-630f-49db-a0f6-a5009fa4ecff%2F1glk908_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[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 $ 29 Direct
labor $ 17 Variable manufacturing overhead $
5 Variable selling and administrative $2 Fixed
costs per year: Fixed manufacturing overhead
$ 540,000 Fixed selling and administrative
expenses $ 110,000 During its first year of
operations, O'Brien produced 91,000 units
and sold 77,000 units. During its second year
of operations, it produced 82,000 units and
sold 91,000 units. In its third year, O'Brien
produced 83,000 units and sold 78,000 units.
The selling price of the company's product is
$79 per unit. Required: 1. Assume the
company uses variable costing and a FIFO
inventory flow assumption (FIFO means first-
in first-out. In other words, it assumes that the
oldest units in inventory are sold first):
Compute the unit product cost for Year 1, Year
2, and Year 3. Prepare an income statement
for Year 1, Year 2, and Year 3.
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