### Required Information**O’Brien Company Overview:**O’Brien Company manufactures and sells a single product. The information below pertains to the company's first three years of operations.**Variable Costs per Unit:**- **Manufacturing:** - Direct materials: $25 - Direct labor: $15 - Variable manufacturing overhead: $6- **Variable selling and administrative:** $2**Fixed Costs per Year:**- Fixed manufacturing overhead: $590,000- Fixed selling and administrative expenses: $150,000**Production and Sales Data:**- **Year 1:** Produced 92,000 units, sold 72,000 units- **Year 2:** Produced 75,000 units, sold 90,000 units- **Year 3:** Produced 81,000 units, sold 76,000 unitsThe selling price per unit is $71.**Tasks:**1. Assume the company uses absorption costing and LIFO inventory flow assumption (last-in, first-out). - 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.Complete these tasks by entering your answers in the provided tabs.

LIFO Method - Under the LIFO Method Company uses the inventory which is produced last and later on inventory which is produced earlier to the latest. Inventory that is purchased first will still remain in the inventory unless and until the recent inventory is fully utilized.1. Income Statement (Absorption Costing) - 2. Unit Product Cost -

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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 Fixed selling and administrative expenses $ $ $ $ 25 15 6 2 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. $590,000 $150,000 During its first year of operations, O'Brien produced 92,000 units and sold 72,000 units. During its second year of operations, it produced 75,000 units and sold 90,000 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 $71 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):

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 Fixed selling and administrative expenses $ $ $ $ 25 15 6 2 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. $590,000 $150,000 During its first year of operations, O'Brien produced 92,000 units and sold 72,000 units. During its second year of operations, it produced 75,000 units and sold 90,000 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 $71 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):

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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! 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 Fixed selling and administrative expenses 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. During its first year of operations, O'Brien produced 98,000 units and sold 74,000 units. During its second year of operations, it produced 80,000 units and sold 99,000 units. In its third year, O'Brien produced 90,000 units and sold 85,000 units. The selling price of the company's product is $78 per unit. Req 4A 4. Assume the company uses absorption costing and a LIFO inventory flow assumption (LIFO…
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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 Fixed selling and administrative expenses $560,000 $100,000 During its first year of operations, O'Brien produced 98,000 units and sold 75,000 units. During its second year of operations, it produced 80,000 units and sold 98,000 units. In its third year, O'Brien produced 90,000 units and sold 85,000 units. The selling price of the company's product is $74 per unit. 2. Assume the company uses variable 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.…
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