CS_3_QA3_LA:Req 3A: Compute the unit product cost for Year 1, Year 2, and Year 3. (Round your intermediate calculations and final answers to 2 decimal places.) Unit Product CostYear 1 Year 2 Year 3 Req 3B: Prepare an income statement for Year 1, Year 2, and Year 3. (Round your intermediate calculations to 2 decimal places.) O’Brien CompanyAbsorption Costing Income Statement Year 1Year 2Year 3Sales Cost of goods sold Gross margin000Selling and administrative expenses Net operating income$0$0$0 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 firstthree years of operations:Variable costs per unit:Manufacturing:Direct materials30Direct labor14Variable manufacturing overheadVariable selling and administrativeFixed costs per year:Fixed manufacturing overheadFixed selling and administrative expenses2$530,000$140,000During its first year of operations, O'Brien produced 90,000 units and sold 71,000 units. During its second year ofoperations, it produced 76,000 units and sold 90,000 units. In its third year, O'Brien produced 88,000 units and sold83,000 units. The selling price of the company's product is $76 per unit.3. Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In other words, itassumes that the oldest units in inventory are sold first):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.Complete this question by entering your answers in the tabs below.Req 3AReq 3B

Name: CS_3_QA3_LA:Req 3A: Compute the unit product cost for Year 1, Year 2,
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Description: CS_3_QA3_LA:Req 3A: Compute the unit product cost for Year 1, Year 2, and Year 3. (Round your intermediate calculations and final answers to 2 decimal places.) Unit Product CostYear 1 Year 2 Year 3 Req 3B: Prepare an income statement for Year 1,

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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CS_3_QA3_LA:

Req 3A: Compute the unit product cost for Year 1, Year 2, and Year 3. (Round your intermediate calculations and final answers to 2 decimal places.)

	Unit Product Cost
Year 1
Year 2
Year 3

Req 3B: Prepare an income statement for Year 1, Year 2, and Year 3. (Round your intermediate calculations to 2 decimal places.)

O’Brien Company
Absorption Costing Income Statement
	Year 1	Year 2	Year 3
Sales
Cost of goods sold
Gross margin	0	0	0
Selling and administrative expenses
Net operating income	$0	$0	$0

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
30
Direct labor
14
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expenses
2
$530,000
$140,000
During its first year of operations, O'Brien produced 90,000 units and sold 71,000 units. During its second year of
operations, it produced 76,000 units and sold 90,000 units. In its third year, O'Brien produced 88,000 units and sold
83,000 units. The selling price of the company's product is $76 per unit.
3. Assume the company uses absorption 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):
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.
Complete this question by entering your answers in the tabs below.
Req 3A
Req 3B

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