Required information Case 4-29 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO4-1, LO4-2] [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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 27 $ 14 $4 $2 $ 570,000 $ 110,000 During its first year of operations, O'Brien produced 100,000 units and sold 74,000 units. During its second year of operations, it produced 76,000 units and sold 97,000 units. In its third year, O'Brien produced 81,000 units and sold 76,000 units. The selling price of the company's product is $77 per unit. ase 4-29 Part-3 (Algo) Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In her words, it assumes that the oldest units in inventory are sold first): Compute the unit product cost for Year 1, Year 2, and Year 3. Prepare an income statement for Year 1, Year 2, and Year 3.
Required information Case 4-29 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO4-1, LO4-2] [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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 27 $ 14 $4 $2 $ 570,000 $ 110,000 During its first year of operations, O'Brien produced 100,000 units and sold 74,000 units. During its second year of operations, it produced 76,000 units and sold 97,000 units. In its third year, O'Brien produced 81,000 units and sold 76,000 units. The selling price of the company's product is $77 per unit. ase 4-29 Part-3 (Algo) Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In her words, it assumes that the oldest units in inventory are sold first): Compute the unit product cost for Year 1, Year 2, and Year 3. Prepare an income statement for Year 1, Year 2, and Year 3.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
![!
Required information
Case 4-29 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO4-1,
LO4-2]
[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
Direct labor
Variable manufacturing overhead
Variable selling and
administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative
expenses
$
570,000
$
110,000
During its first year of operations, O'Brien produced 100,000 units and sold 74,000 units. During its second
year of operations, it produced 76,000 units and sold 97,000 units. In its third year, O'Brien produced 81,000
units and sold 76,000 units. The selling price of the company's product is $77 per unit.
Case 4-29 Part-3 (Algo)
3. Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In
other words, it assumes that the oldest 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 3A
Prepare an income statement for Year 1, Year 2, and Year 3.
Note: Round your intermediate calculations to 2 decimal places.
Req 3B
$ 27
$ 14
$4
$2
O'Brien Company
Absorption Costing Income Statement
Year 1
Year 2
$
< Req 3A
0
0 $
0
Year 3
0 $
0
0
Req 3B >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4bcf247f-09ed-4930-be62-b4d24c9bf828%2Fe5c373d0-fba4-44ea-804d-cf2c400ef8fc%2Flgu1hdn_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
Case 4-29 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO4-1,
LO4-2]
[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
Direct labor
Variable manufacturing overhead
Variable selling and
administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative
expenses
$
570,000
$
110,000
During its first year of operations, O'Brien produced 100,000 units and sold 74,000 units. During its second
year of operations, it produced 76,000 units and sold 97,000 units. In its third year, O'Brien produced 81,000
units and sold 76,000 units. The selling price of the company's product is $77 per unit.
Case 4-29 Part-3 (Algo)
3. Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In
other words, it assumes that the oldest 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 3A
Prepare an income statement for Year 1, Year 2, and Year 3.
Note: Round your intermediate calculations to 2 decimal places.
Req 3B
$ 27
$ 14
$4
$2
O'Brien Company
Absorption Costing Income Statement
Year 1
Year 2
$
< Req 3A
0
0 $
0
Year 3
0 $
0
0
Req 3B >
Expert Solution
Step 1
The income statement refers to the financial statement used for the computation of net income by deducting all the expenses from the revenues earned during the year by the company.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.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