Problem 6-18 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6- 1, LO6-2] 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 Fixed selling and administrative expenses $ 26 $ 13 $5 $ 3 $ 450,000 $ 210,000 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 $58 per unit. 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. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3A Req 3B Prepare an income statement for Year 1, Year 2, and Year 3. Assume the company uses variable costing. Haas Company Variable Costing Income Statement Year 1 Year 2 Year 3 0 0 Net operating income (loss)
Problem 6-18 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6- 1, LO6-2] 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 Fixed selling and administrative expenses $ 26 $ 13 $5 $ 3 $ 450,000 $ 210,000 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 $58 per unit. 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. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3A Req 3B Prepare an income statement for Year 1, Year 2, and Year 3. Assume the company uses variable costing. Haas Company Variable Costing Income Statement Year 1 Year 2 Year 3 0 0 Net operating income (loss)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Problem 6-18 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-
1, LO6-2]
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
Fixed selling and administrative expenses
$ 26
$ 13
$5
$ 3
$ 450,000
$ 210,000
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 $58 per unit.
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.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2A
Req 2B
Req 3A
Req 3B
Prepare an income statement for Year 1, Year 2, and Year 3. Assume the company uses variable costing.
Haas Company
Variable Costing Income Statement
Year 1
Year 2
Year 3
0
0
Net operating income (loss)
<Req 2A
Req 3A >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd915750e-09de-430c-93a6-b025b5d85f5c%2F0a23c7ec-dea2-4d06-8196-6295a7fb4767%2F2rmzq5_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 6-18 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-
1, LO6-2]
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
Fixed selling and administrative expenses
$ 26
$ 13
$5
$ 3
$ 450,000
$ 210,000
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 $58 per unit.
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.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2A
Req 2B
Req 3A
Req 3B
Prepare an income statement for Year 1, Year 2, and Year 3. Assume the company uses variable costing.
Haas Company
Variable Costing Income Statement
Year 1
Year 2
Year 3
0
0
Net operating income (loss)
<Req 2A
Req 3A >
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education