Exercise 6-6 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2] Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year 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 $ 288,000 Fixed selling and administrative $ 198,000 During the year, the company produced 24,000 units and sold 20,000 units. The selling price of the company's product is $48 per unit. Required: 1. Assume the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year. Complete this question by entering your answers in the lav pri Req 1A Req 1B $ 13 $7 $1 $1 Req 2A $ Compute the unit product cost. Assume the company uses absorption costing. Unit product cost 33 Req 2B < Req 1A Req 1B >
Exercise 6-6 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2] Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year 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 $ 288,000 Fixed selling and administrative $ 198,000 During the year, the company produced 24,000 units and sold 20,000 units. The selling price of the company's product is $48 per unit. Required: 1. Assume the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year. Complete this question by entering your answers in the lav pri Req 1A Req 1B $ 13 $7 $1 $1 Req 2A $ Compute the unit product cost. Assume the company uses absorption costing. Unit product cost 33 Req 2B < Req 1A Req 1B >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Exercise 6-6 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1,
LO6-2]
Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year 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
$ 288,000
Fixed selling and administrative
$ 198,000
During the year, the company produced 24,000 units and sold 20,000 units. The selling price of the company's product is $48 per unit.
Required:
1. Assume the company uses absorption costing:
a. Compute the unit product cost.
b. Prepare an income statement for the year.
2. Assume the company uses variable costing:
a. Compute the unit product cost.
b. Prepare an income statement for the year.
Complete this question by entering your answers in the lav pri
Req 1A
Req 1B
$ 13
$7
$1
$1
Req 2A
$
Compute the unit product cost. Assume the company uses absorption costing.
Unit product cost
33
Req 2B
< Req 1A
Req 1B >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb76579ad-faff-4bf7-92eb-956a324b8de5%2F46e00f02-3c8d-4243-9f91-e1a7d68ed6e4%2F0t6zp5l_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 6-6 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1,
LO6-2]
Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year 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
$ 288,000
Fixed selling and administrative
$ 198,000
During the year, the company produced 24,000 units and sold 20,000 units. The selling price of the company's product is $48 per unit.
Required:
1. Assume the company uses absorption costing:
a. Compute the unit product cost.
b. Prepare an income statement for the year.
2. Assume the company uses variable costing:
a. Compute the unit product cost.
b. Prepare an income statement for the year.
Complete this question by entering your answers in the lav pri
Req 1A
Req 1B
$ 13
$7
$1
$1
Req 2A
$
Compute the unit product cost. Assume the company uses absorption costing.
Unit product cost
33
Req 2B
< Req 1A
Req 1B >
Transcribed Image Text:Prepare and income statement for the year. Assume the company
Lynch Company
Absorption Costing Income Statement
Req 1A
Complete this question by entering your answers in the tabs below.
Req 1B
Req 2A
$
$
21
Req 2B
Compute the unit product cost. Assume the company uses variable costing
Unit product cost
< Req 1B
0
Lynch Company
Variable Costing Income Statement
< Req 2A
$
Req 2B >
0
0
0
0
Reg 28
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Step 1: Introduce to income statement
VIEWStep 2: Working for sales revenue
VIEWStep 3: Working for variable selling & administrative expenses and total selling & administrative expenses
VIEWStep 4: Working for unit product cost and cost of goods sold using absorption costing
VIEWStep 5: Working for unit product cost and cost of goods sold using variable costing
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