Haas 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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: $ Fixed manufacturing overhead $ 240,000 Fixed selling and administrative expenses $ 180,000 Req 1 $ 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 $52 per unit. Req ZA $ Required: 1. Compute the company's break-even point in unit sales. 2. Assume the company uses variable costing: 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. 3. Assume the company uses absorption costing: 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. Req 28 23 15 Complete this question by entering your answers in the tabs below. Req 3A Req 38
Haas 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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: $ Fixed manufacturing overhead $ 240,000 Fixed selling and administrative expenses $ 180,000 Req 1 $ 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 $52 per unit. Req ZA $ Required: 1. Compute the company's break-even point in unit sales. 2. Assume the company uses variable costing: 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. 3. Assume the company uses absorption costing: 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. Req 28 23 15 Complete this question by entering your answers in the tabs below. Req 3A Req 38
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:**Haas Company Manufacturing Costs and Sales Analysis**
### Overview
Haas Company manufactures and sells one product. The following details pertain to each of the company’s first three years of operations:
#### Variable Costs per Unit:
- **Manufacturing:**
- Direct materials: $23
- Direct labor: $15
- Variable manufacturing overhead: $6
- **Variable selling and administrative:** $1
#### Fixed Costs per Year:
- Fixed manufacturing overhead: $240,000
- Fixed selling and administrative expenses: $180,000
During the first year of operations, Haas produced 60,000 units and sold 60,000 units. In the second year, the company produced 75,000 units and sold 50,000 units. In the third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company's product is $52 per unit.
### Required Tasks:
1. **Compute the company’s break-even point in unit sales.**
2. **Assume the company uses variable costing:**
- 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.
3. **Assume the company uses absorption costing:**
- 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.
### Interactive Section:
Users are prompted to complete the question by entering their answers in designated tabs.
#### Break-even Unit Sales Calculation:
Users are required to compute the company’s break-even point in unit sales.
Input field placeholder: `Break-even unit sales: __________ units`
Tabs Navigation:
- Req 1: Compute break-even point
- Req 2A, Req 2B: Variable costing calculations
- Req 3A, Req 3B: Absorption costing calculations
Users can navigate through the tabs to input their answers and complete the tasks as instructed.
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