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Discon Corporation manufactures a popular doll called Teardrops. Last year the company started with 10,100 dolls, produced 210,000 dolls, and ended the year with 8,100 dolls. Each doll was sold for $22. The actual unit cost for Teardrops is given below: Direct material Direct labour variable overhead Fixed overhead Total unit cost $ 2.10 0.40 2.60 6.90 $ 12.00 The only selling expenses were a commission of $3 per unit sold and advertising amounting to $351,000. Administrative expenses, all fixed, equaled $271,000. There were no beginning and ending work-in-process inventories. Required 1. Prepare an income statement. 2. Calculate the following per unit costs. a. Prime Cost b. Conversion Cost c. Variable cost

Discon Corporation manufactures a popular doll called Teardrops. Last year the company started with 10,100 dolls, produced 210,000 dolls, and ended the year with 8,100 dolls. Each doll was sold for $22. The actual unit cost for Teardrops is given below: Direct material Direct labour variable overhead Fixed overhead Total unit cost $ 2.10 0.40 2.60 6.90 $ 12.00 The only selling expenses were a commission of $3 per unit sold and advertising amounting to $351,000. Administrative expenses, all fixed, equaled $271,000. There were no beginning and ending work-in-process inventories. Required 1. Prepare an income statement. 2. Calculate the following per unit costs. a. Prime Cost b. Conversion Cost c. Variable cost

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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Discon Corporation manufactures a popular doll called Teardrops. Last year the company started with 10,100 dolls, produced 210,000 dolls, and ended the year with 8,100 dolls. Each doll was sold for $22. The actual unit cost for Teardrops is given below: Direct material $ 2.10 Direct labour variable overhead Fixed overhead Total unit cost 0.40 2.60 6.90 $ 12.00 The only selling expenses were a commission of $3 per unit sold and advertising amounting to $351,000. Administrative expenses, all fixed, equaled $271,000. There were no beginning. and ending work-in-process inventories. Required 1. Prepare an income statement. 2. Calculate the following per unit costs. a. Prime Cost b. Conversion Cost c. Variable cost
Transcribed Image Text:Discon Corporation manufactures a popular doll called Teardrops. Last year the company started with 10,100 dolls, produced 210,000 dolls, and ended the year with 8,100 dolls. Each doll was sold for $22. The actual unit cost for Teardrops is given below: Direct material $ 2.10 Direct labour variable overhead Fixed overhead Total unit cost 0.40 2.60 6.90 $ 12.00 The only selling expenses were a commission of $3 per unit sold and advertising amounting to $351,000. Administrative expenses, all fixed, equaled $271,000. There were no beginning. and ending work-in-process inventories. Required 1. Prepare an income statement. 2. Calculate the following per unit costs. a. Prime Cost b. Conversion Cost c. Variable cost
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