# Required Information for O’Brien Company Manufacturing Operations## OverviewO’Brien Company manufactures and sells a single product. Below is detailed information relevant to each of the first three years of the company's operations:### Cost Structure#### 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:** - Units produced: 92,000 - Units sold: 72,000- **Year 2:** - Units produced: 75,000 - Units sold: 90,000- **Year 3:** - Units produced: 81,000 - Units sold: 76,000### Additional Information- **Selling price per unit:** $71## Analysis Tasks1. **Compute the unit product cost** for Year 1, Year 2, and Year 3. 2. **Prepare an income statement** for Year 1, Year 2, and Year 3 using absorption costing and a FIFO inventory flow assumption (FIFO: First-In, First-Out).---This content is designed for educational purposes, providing insights into cost accounting and financial statement preparation under specific inventory assumptions.

FIFO Method - Under the FIFO Method company uses inventory that was purchased first in the…

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 $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. 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 Fixed selling and administrative expenses $ $ $ $ 25 15 6 2 $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. 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Need Answer please
Subject :- Accounting
[The following information applies to the questions Diego Company manufactures one product that is sold for $76 per unit in two geographic regions-the East and West. regions. The following information pertains to the company's first year of operations in which it produced 47,000 units and sold 42,000 units. 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 expense Foundational 7-5 (Algo) The company sold 32,000 units in the East region and 10,000 units in the West region. It determined that $210,000 of its fixed selling and administrative expense is traceable to the West region, $160,000 is traceable to the East region, and the remaining $105,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of its…
Required information [The following information applies to the questions displayed below.] Aces Incorporated, a manufacturer of tennis rackets, began operations this year. The company produced 6,850 rackets and sold 5,330. Each racket was sold at a price of $90. Fixed overhead costs are $89,050 per year, and fixed selling and administrative costs are $67,000 per year. The company also reports the following per unit variable costs for the year. Direct materials Direct labor Variable overhead Variable selling and administrative expenses Prepare an income statement under variable costing. ACES INCORPORATED Income Statement (Variable Costing) Sales Less: Variable expenses Variable cost of goods sold Vanable selling and administrative expenses Contribution margin Fixed overhead Fixed selling and administrative expenses 333 X x X > $ 89,050✔ 67,000 $479,700 335,790 $12 8 5 2 156,050 Income $ 179,740 "Red text indicates no response was expected in a cell or a formula-based calculation is…
Required information [The following information applies to the questions displayed below.] Diego Company manufactures one product that is sold for $76 per unit in two geographic regions-East and West. The following information pertains to the company's first year of operations in which it produced 58,000 units and sold 54,000 units. 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 expense 2. What is the unit product cost under absorption costing? The company sold 40,000 units in the East region and 14,000 units in the West region. It determined $320,000 of its fixed selling and administrative expense is traceable to the West region, $270,000 is traceable to the East region, and the remaining $50,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing overhead…
Required information [The following information applies to the questions displayed below.] Diego Company manufactures one product that is sold for $73 per unit in two geographic regions-the East and West regions. The following information pertains to the company's first year of operations in which it produced 44,000 units and sold 39,000 units. 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 expense a. What is the company's break-even point in unit sales? The company sold 29,000 units in the East region and 10,000 units in the West region. It determined that $180,000 of its fixed selling and administrative expense is traceable to the West region, $130,000 is traceable to the East region, and the remaining $90,000 is a common fixed expense. The company will continue to incur the total amount of its fixed…
Domestic
! Required information [The following information applies to the questions displayed below.] Diego Company manufactures one product that is sold for $76 per unit in two geographic regions-the East and West regions. The following information pertains to the company's first year of operations in which it produced 58,000 units and sold 54,000 units. 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 expense $ 23 $ 15 $3 $ 3 $ 1,160,000 $ 640,000 The company sold 40,000 units in the East region and 14,000 units in the West region. It determined that $320,000 of its fixed selling and administrative expense is traceable to the West region, $270,000 is traceable to the East region, and the remaining $50,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing overhead…
Required information [The following information applies to the questions displayed below.] Diego Company manufactures one product that is sold for $71 per unit in two geographic regions-East and West. The following information pertains to the company's first year of operations in which it produced 54,000 units and sold 49,000 units. 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 expense $ 22 $ 12 $3 $5 The company sold 36,000 units in the East region and 13,000 units in the West region. It determined that $280,000 of its fixed selling and administrative expense is traceable to the West region, $230,000 is traceable to the East region, and the remaining $76,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce…