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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead $ 26 $ 17 $ 4 $1 $520,000 Fixed selling and administrative expenses. $ 100,000 During its first year of operations, O'Brien produced 97,000 units and sold 80,000 units. During its second year of operations, it produced 81,000 units and sold 93,000 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 $75 per unit. 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.
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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead $ 26 $ 17 $ 4 $1 $520,000 Fixed selling and administrative expenses. $ 100,000 During its first year of operations, O'Brien produced 97,000 units and sold 80,000 units. During its second year of operations, it produced 81,000 units and sold 93,000 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 $75 per unit. 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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please provide correct and complete answer with compulsory explanation , calculation for each part ,steps clearly answer in text from remember each part and calculation should have explanation and show working for each calculation
![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
Direct labor
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
$ 26
$17
$ 4
$ 1
Fixed selling and administrative expenses.
$520,000
$ 100,000
During its first year of operations, O'Brien produced 97,000 units and sold 80,000 units. During its second year of
operations, it produced 81,000 units and sold 93,000 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 $75 per unit.
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.
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Req 3A
Req 38
Prepare an income statement for Year 1, Year 2, and Year 3.
Note: Round your intermediate calculations to 2 decimal places.
O'Brien Company
Absorption Costing Income Statement
Req 3A
Req 38
Year 1
Year 2
Year 3
Sales
$ 6,000,000
6,975,000
5,850,000
Cost of goods sold
3,760,000 4,371,000
3,666,000
Gross margin
2,240,000
2,604,000
2,184,000
Compute the unit product <
Note: Round your intermed
Unit
Product
Selling and administrative expenses
80,000 x
93,000 ×
78,000 ×
Cost
Net operating income
$ 2,160,000
Year 1
$
52.360
2,511,000
2,106,000
Year 2
$
53.42](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2e190b1c-3e91-4c89-9cb0-3d50c53d8ddb%2F2d71f746-71f6-43a0-b959-7482abfe07d2%2Fgl0ou3_processed.png&w=3840&q=75)
Transcribed Image Text: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
Direct labor
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
$ 26
$17
$ 4
$ 1
Fixed selling and administrative expenses.
$520,000
$ 100,000
During its first year of operations, O'Brien produced 97,000 units and sold 80,000 units. During its second year of
operations, it produced 81,000 units and sold 93,000 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 $75 per unit.
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.
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Req 3A
Req 38
Prepare an income statement for Year 1, Year 2, and Year 3.
Note: Round your intermediate calculations to 2 decimal places.
O'Brien Company
Absorption Costing Income Statement
Req 3A
Req 38
Year 1
Year 2
Year 3
Sales
$ 6,000,000
6,975,000
5,850,000
Cost of goods sold
3,760,000 4,371,000
3,666,000
Gross margin
2,240,000
2,604,000
2,184,000
Compute the unit product <
Note: Round your intermed
Unit
Product
Selling and administrative expenses
80,000 x
93,000 ×
78,000 ×
Cost
Net operating income
$ 2,160,000
Year 1
$
52.360
2,511,000
2,106,000
Year 2
$
53.42
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