Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable cost per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses. Required: 1. Compute the company's break-even point in units sold. Break-even und sales S units 25 During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company's product is $57 per unit. 4 2 $480,000 $360,000

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of
operations:
Variable cost per unit:
Manufacturing:
Direct materials
Direct labour
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expenses
Required:
1. Compute the company's break-even point in units sold.
Break-even unit sales
S
During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it
produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of
the company's product is $57 per unit.
units
25
12
4
2
$480,000
$360,000
Transcribed Image Text:Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable cost per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses Required: 1. Compute the company's break-even point in units sold. Break-even unit sales S During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company's product is $57 per unit. units 25 12 4 2 $480,000 $360,000
2. Assume the company uses variable costing:
a. Compute unit product costs for Year 1, Year 2, and Year 3.
Unit product cost
Variable expenses:
b. Prepare an income statement for year 1, year 2, and year 3.
Total variable expenses
Fixed expenses:
Total fixed expenses:
Net operating income (loss)
Unit product cost
Your 2
Year 1
Net operating income (loss)
Year 3
Haas Company
Varia Costing Income Statement
Year 1
Year 2
$
$
Your 3
Company
Absorption Costing Income Statement
Year 1
0
3. Assume the company uses absorption costing:
a. Compute unit product costs for Year 1, Year 2, and Year 3. (Round your intermediate and final answers to 2 decimal places.)
20
0
0 $
0
0 $
Year 2
b. Prepare an income statement for year 1, year 2, and year 3. (Round your Intermediate calculations to 2 decimal places.)
Year 2
0
0
0
0
0 $
0 $
Year 3
Year 3
0
0
0
0
0
0
Transcribed Image Text:2. Assume the company uses variable costing: a. Compute unit product costs for Year 1, Year 2, and Year 3. Unit product cost Variable expenses: b. Prepare an income statement for year 1, year 2, and year 3. Total variable expenses Fixed expenses: Total fixed expenses: Net operating income (loss) Unit product cost Your 2 Year 1 Net operating income (loss) Year 3 Haas Company Varia Costing Income Statement Year 1 Year 2 $ $ Your 3 Company Absorption Costing Income Statement Year 1 0 3. Assume the company uses absorption costing: a. Compute unit product costs for Year 1, Year 2, and Year 3. (Round your intermediate and final answers to 2 decimal places.) 20 0 0 $ 0 0 $ Year 2 b. Prepare an income statement for year 1, year 2, and year 3. (Round your Intermediate calculations to 2 decimal places.) Year 2 0 0 0 0 0 $ 0 $ Year 3 Year 3 0 0 0 0 0 0
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