CS_3_QA4_PIR:Req 4A: Compute the unit product cost for Year 1, Year 2, and Year 3. (Round your intermediate calculations and final answers to 2 decimal places.) Unit Product CostYear 1 Year 2 Year 3 Req 4B: Prepare an income statement for Year 1, Year 2, and Year 3. (Round your intermediate calculations to 2 decimal places.) O’Brien CompanyAbsorption Costing Income Statement Year 1Year 2Year 3 Required information[The following information applies to the questions displayed below.]O'Brien Company manufactures and sells one product. The following information pertains to each of the company's firstthree years of operations:Variable costs per unit:Manufacturing:Direct materials30Direct laborVariable manufacturing overheadVariable selling and administrativeFixed costs per year:Fixed manufacturing overheadFixed selling and administrative expenses1442$530,000$140,000During its first year of operations, O'Brien produced 90,000 units and sold 71,000 units. During its second year ofoperations, it produced 76,000 units and sold 90,000 units. In its third year, O'Brien produced 88,000 units and sold83,000 units. The selling price of the company's product is $76 per unit.4. Assume the company uses absorption costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, itassumes that the newest units in inventory are sold first):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 4AReq 4B

Using absorption costing, the fixed manufacturing costs are also included in product cost. The fixed…

Answered: Req 4A: Compute the unit product cost…

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Chapter1: Financial Statements And Business Decisions

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CS_3_QA4_PIR:

Req 4A: Compute the unit product cost for Year 1, Year 2, and Year 3. (Round your intermediate calculations and final answers to 2 decimal places.)

	Unit Product Cost
Year 1
Year 2
Year 3

Req 4B: Prepare an income statement for Year 1, Year 2, and Year 3. (Round your intermediate calculations to 2 decimal places.)

O’Brien Company
Absorption Costing Income Statement
	Year 1	Year 2	Year 3

Required information
[The following information applies to the questions displayed below.]
O'Brien 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
30
Direct labor
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expenses
14
4
2
$530,000
$140,000
During its first year of operations, O'Brien produced 90,000 units and sold 71,000 units. During its second year of
operations, it produced 76,000 units and sold 90,000 units. In its third year, O'Brien produced 88,000 units and sold
83,000 units. The selling price of the company's product is $76 per unit.
4. Assume the company uses absorption costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it
assumes that the newest units in inventory are sold first):
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 4A
Req 4B

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