operations:Variable costs per unit:Manufacturing:Direct materialsDirect laborRequired:1. Assume that the company uses absorption costing:a. Compute the unit product cost.b. Prepare an income statement for the year.$ 10$4$1$1Variable manufacturing overheadVariable selling and administrativeFixed costs per year:Fixed manufacturing overhead$ 340,000Fixed selling and administrative.$ 250,000During the year, the company produced 34,000 units and sold 16,000 units. The selling price of the company's product is $54 per unit.2. Assume that the company uses variable costing:a. Compute the unit product cost.b. Prepare an income statement for the year.Return to questAnswer is not complete. SalesVariable expenses:Lynch CompanyVariable Costing Income StatementVariable cost of goods soldBeginning merchandise inventoryVariable cost of goods soldFixed manufacturing overheadFixed manufacturing overheadNet operating incomex$ 510,000 X270,000 X240,000340,000590,000 X$uses$ 864,0001,020,000(156,000)930,000(1,086,000)able

Absorption costing: In the absorption costing, product cost includes direct materials,direct labor…

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 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: $ 10 $4 $1 $1 $ 340,000 $ 250,000 During the year, the company produced 34,000 units and sold 16,000 units. The selling price of the company's product is $54 per unit. a. Compute the unit product cost. b. Prepare an income statement for the year. Return to ques

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 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: $ 10 $4 $1 $1 $ 340,000 $ 250,000 During the year, the company produced 34,000 units and sold 16,000 units. The selling price of the company's product is $54 per unit. a. Compute the unit product cost. b. Prepare an income statement for the year. Return to ques

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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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

operations:
Variable costs per unit:
Manufacturing:
Direct materials
Direct labor
Required:
1. Assume that the company uses absorption costing:
a. Compute the unit product cost.
b. Prepare an income statement for the year.
$ 10
$4
$1
$1
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
$ 340,000
Fixed selling and administrative.
$ 250,000
During the year, the company produced 34,000 units and sold 16,000 units. The selling price of the company's product is $54 per unit.
2. Assume that the company uses variable costing:
a. Compute the unit product cost.
b. Prepare an income statement for the year.
Return to quest
Answer is not complete.

Sales
Variable expenses:
Lynch Company
Variable Costing Income Statement
Variable cost of goods sold
Beginning merchandise inventory
Variable cost of goods sold
Fixed manufacturing overhead
Fixed manufacturing overhead
Net operating income
x
$ 510,000 X
270,000 X
240,000
340,000
590,000 X
$
uses
$ 864,000
1,020,000
(156,000)
930,000
(1,086,000)
able

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