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High Country, Incorporated, produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first mon of the plant's operation: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit Fixed (per month) Manufacturing costs: Required: 1. Assume that the company uses absorption costing a. Calculate the unit product cost. 49,000 44,000 $ 81 Direct materials cost per unit $ 14 Direct labor cost per unit $ 10 $3 Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (per month) $ 735,000 Management is anxious to assess the profitability of the new camp cot during the month of May. b. Prepare an income statement for May 2. Assume that the company uses variable costing $3 $ 567,000

High Country, Incorporated, produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first mon of the plant's operation: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit Fixed (per month) Manufacturing costs: Required: 1. Assume that the company uses absorption costing a. Calculate the unit product cost. 49,000 44,000 $ 81 Direct materials cost per unit $ 14 Direct labor cost per unit $ 10 $3 Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (per month) $ 735,000 Management is anxious to assess the profitability of the new camp cot during the month of May. b. Prepare an income statement for May 2. Assume that the company uses variable costing $3 $ 567,000

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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Required: 1. Assume that the company uses absorption costing. a. Calculate the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a. Calculate the unit product cost. b. Prepare a contribution format income statement for May. Complete this question by entering your answers in the table below. Req 1A Req 18 Reg 2A Req 28 Prepare a contribution format income statement for May. Assume that the company uses variable costing. High Country, Incorporated Variable Costing Income Statement
Transcribed Image Text:Required: 1. Assume that the company uses absorption costing. a. Calculate the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a. Calculate the unit product cost. b. Prepare a contribution format income statement for May. Complete this question by entering your answers in the table below. Req 1A Req 18 Reg 2A Req 28 Prepare a contribution format income statement for May. Assume that the company uses variable costing. High Country, Incorporated Variable Costing Income Statement
High Country, Incorporated, produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit Fixed (per month) e 49,000 44,000 $ 81 Required: 1. Assume that the company uses absorption costing. a. Calculate the unit product cost b. Prepare an income statement for May 2. Assume that the company uses variable costing $3 $ 567,000 Manufacturing costs: Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (per month) Management is anxious to assess the profitability of the new camp cot during the month of May. $14 $ 10 $3 $ 735,000
Transcribed Image Text:High Country, Incorporated, produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit Fixed (per month) e 49,000 44,000 $ 81 Required: 1. Assume that the company uses absorption costing. a. Calculate the unit product cost b. Prepare an income statement for May 2. Assume that the company uses variable costing $3 $ 567,000 Manufacturing costs: Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (per month) Management is anxious to assess the profitability of the new camp cot during the month of May. $14 $ 10 $3 $ 735,000
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