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 $ 25 $ 12 $4 $2 Required: $ 480,000 $360,000 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 $57 per unit. 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.
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 $ 25 $ 12 $4 $2 Required: $ 480,000 $360,000 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 $57 per unit. 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![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
$ 25
$ 12
$4
$2
Required:
$ 480,000
$360,000
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 $57 per
unit.
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3bcb37db-7c85-47bb-a190-afcc0c785246%2F5b094e8d-c5d4-455c-a0f5-58f9ad91de27%2F9rkloz_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
$ 25
$ 12
$4
$2
Required:
$ 480,000
$360,000
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 $57 per
unit.
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.
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