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 12 Direct labor Variable manufacturing overhead Variable selling and administrative 4 2 2 Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative $370, 000 $200, 000 During the year, the company produced 37,000 units and sold 18,000 units. The selling price of the company's product is $55 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. Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2A Req 28

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
Complete this question by entering your answers in the tabs below.
Req 1A
Req 1B
Req 2A
Req 2B
Prepare an income statement for the year. Assume that the company uses variable costing.
Lynch Company
Variable Costing Income Statement
< Req 2A
Req 28 >
Transcribed Image Text: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. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Prepare an income statement for the year. Assume that the company uses variable costing. Lynch Company Variable Costing Income Statement < Req 2A Req 28 >
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
12
Direct labor
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative
4
2
$370,000
$200, 000
During the year, the company produced 37,000 units and sold 18,000 units. The selling price of the company's product is
$55 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.
Complete this question by entering your answers in the tabs below.
Req 1A
Req 18
Req 2A
Reg 28
Compute the unit product cost. Assume that the company uses absorption costing.
Unit product cost
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 12 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative 4 2 $370,000 $200, 000 During the year, the company produced 37,000 units and sold 18,000 units. The selling price of the company's product is $55 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. Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2A Reg 28 Compute the unit product cost. Assume that the company uses absorption costing. Unit product cost
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