Question: 077 O Brie 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: $25 Direct labor: $17 Variable manufacturing overhead: $4 Variable selling and administrative: $2 Fixed costs per year: Fixed manufacturing overhead: $550,000 Fixed selling and administrative expenses: $140,000 During its first year of operations, O Brien produced 94,000 units and sold 78,000 units. During its second year of operations, it produced 80,000 units and sold 91,000 units. In its third year, O Brien produced 83,000 units and sold 78,000 units. The selling price of the company's product is $79 per unit. Assume the company uses absorption costing and a LIFO inventory flow assumption. 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.
Question: 077 O Brie 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: $25 Direct labor: $17 Variable manufacturing overhead: $4 Variable selling and administrative: $2 Fixed costs per year: Fixed manufacturing overhead: $550,000 Fixed selling and administrative expenses: $140,000 During its first year of operations, O Brien produced 94,000 units and sold 78,000 units. During its second year of operations, it produced 80,000 units and sold 91,000 units. In its third year, O Brien produced 83,000 units and sold 78,000 units. The selling price of the company's product is $79 per unit. Assume the company uses absorption costing and a LIFO inventory flow assumption. 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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Transcribed Image Text:Question: 077
O Brie 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: $25
Direct labor: $17
Variable manufacturing overhead: $4
Variable selling and administrative: $2
Fixed costs per year:
Fixed manufacturing overhead: $550,000
Fixed selling and administrative expenses: $140,000
During its first year of operations, O Brien produced 94,000 units and sold
78,000 units. During its second year of operations, it produced 80,000 units
and sold 91,000 units. In its third year, O Brien produced 83,000 units and
sold 78,000 units. The selling price of the company's product is $79 per
unit.
Assume the company uses absorption costing and a LIFO inventory flow
assumption.
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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