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 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. 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. 4. Assume the company uses absorption costing and a LIFO inventory flow assumption (LIFO means last-in first-out; in other words assumes the newest units in inventory are sold first): Req 4A Complete this question by entering your answers in the tabs below. Req 4B Sales Cost of goods sold Gross margin Prepare an income statement for Year 1, Year 2, and Year 3. Note: Round your intermediate calculations to 2 decimal places. X Answer is complete but not entirely correct. $ 30 $ 17 $5 $2 $ 560,000 $ 140,000 O'Brien Company Absorption Costing Income Statement Year 1 $5,772,000✔ 7,722,000 5,656,000 5,148,000 116,000 2,574,000 ✓ ✓ $ Year 2 Year 3 6,630,000 4,420,000 X 2,210,000
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 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. 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. 4. Assume the company uses absorption costing and a LIFO inventory flow assumption (LIFO means last-in first-out; in other words assumes the newest units in inventory are sold first): Req 4A Complete this question by entering your answers in the tabs below. Req 4B Sales Cost of goods sold Gross margin Prepare an income statement for Year 1, Year 2, and Year 3. Note: Round your intermediate calculations to 2 decimal places. X Answer is complete but not entirely correct. $ 30 $ 17 $5 $2 $ 560,000 $ 140,000 O'Brien Company Absorption Costing Income Statement Year 1 $5,772,000✔ 7,722,000 5,656,000 5,148,000 116,000 2,574,000 ✓ ✓ $ Year 2 Year 3 6,630,000 4,420,000 X 2,210,000
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 means last-in first-out; in other words, it
assumes the newest units in inventory are sold first):
Reg 4B
Complete this question by entering your answers in the tabs below.
Prepare an income statement for Year 1, Year 2, and Year 3.
Note: Round your intermediate calculations to 2 decimal places.
$ 30
$ 17
$ 560,000
$ 140,000
O'Brien Company
Absorption Costing Income Statement
Year 1
$5,772,000
5,656,000
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
$5
$2
> Answer is complete but not entirely correct.
116,000 2,574,000
$ 288,000 $ 338,000
Year 2
$
7,722,000
6,630,000
5,148,000 X 4,420,000
2,210,000
$310,000
$
Year 3](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6bcdff69-8e2f-4d70-9fa6-ce88ac327df5%2Fc9df7104-e05d-455f-a97f-d20cc3b14d78%2Ftnv2o6o_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
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 means last-in first-out; in other words, it
assumes the newest units in inventory are sold first):
Reg 4B
Complete this question by entering your answers in the tabs below.
Prepare an income statement for Year 1, Year 2, and Year 3.
Note: Round your intermediate calculations to 2 decimal places.
$ 30
$ 17
$ 560,000
$ 140,000
O'Brien Company
Absorption Costing Income Statement
Year 1
$5,772,000
5,656,000
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
$5
$2
> Answer is complete but not entirely correct.
116,000 2,574,000
$ 288,000 $ 338,000
Year 2
$
7,722,000
6,630,000
5,148,000 X 4,420,000
2,210,000
$310,000
$
Year 3
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