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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. Fixed selling and administrative $ S b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 11 2 2 $264,000 $174,000 During the year, the company produced 22,000 units and sold 18,000 units. The selling price of the company's product is $45 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost.

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. Fixed selling and administrative $ S b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 11 2 2 $264,000 $174,000 During the year, the company produced 22,000 units and sold 18,000 units. The selling price of the company's product is $45 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost.

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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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. Fixed selling and administrative $ S 11 2 2 $264,000 $174,000 During the year, the company produced 22,000 units and sold 18,000 units. The selling price of the company's product is $45 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year.
Transcribed Image Text: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. Fixed selling and administrative $ S 11 2 2 $264,000 $174,000 During the year, the company produced 22,000 units and sold 18,000 units. The selling price of the company's product is $45 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year.
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