0Required informationExercise 6-3 (Algo) Income statement under absorption costing and variable costing LO P1, P2[The following information applies to the questions displayed below.]Cool Sky reports the following for its first year of operations. The company produced 40,000 units and sold 32,000 unitsat a price of $130 per unit.Direct materialsDirect laborVariable overheadFixed overheadVariable selling and administrative expensesFixed selling and administrative expensesExercise 6-3 (Algo) Part 1b.1b. Assume the company uses absorption costing. Prepare its Income statement for the year under absorption costing.Income Statement (Absorption Costing)SalesCost of goods soldGross profitSelling and administrative expensesIncomeS$ 54 per unit$ 20 per unit$6 per unit$ 440,000 per year$ 11 per unit$ 110,000 per year4,160,0002,912,0001,248,000352,000890,000 !Required informationExercise 6-3 (Algo) Income statement under absorption costing and variable costing LO P1, P2[The following information applies to the questions displayed below.]Cool Sky reports the following for its first year of operations. The company produced 40,000 units and sold 32,000 unitsat a price of $130 per unit.Direct materials:Direct laborVariable overheadFixed overheadVariable selling and administrative expensesFixed selling and administrative expensesExercise 6-3 (Algo) Part 1a10. Assume the company uses absorption costing. Determine its total product cost per unit.Answer is complete and correct.AbsorptioncostingPer unit product cost using:Direct materialsDirect laborVariable overheadFixed overheadTotal product cost per unit1000s5420611$ 54 per unit$ 20 per unit$6 per unit$ 440,000 per year$ 11 per unit$ 110,000 per year91

Unit product cost under Absorption costing consists of Direct materials, Direct labor, Variable…

[The following information applies to the questions displayed below. Cool Sky reports the following for its first year of operations. The company produced 40,000 units and sold 32,000 units at a price of $130 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses Exercise 6-3 (Algo) Part 1b 1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing. Income Statement (Absorption Costing) Sales Cost of goods sold Gross prof Selling and administrative expenses Income S S $ 54 per unit. $ 20 per unit $6 per unit $ 440,000 per year $ 11 per unit $ 110,000 per year 4,160,000 2,912,000 1,248,000 352,000 896,000

[The following information applies to the questions displayed below. Cool Sky reports the following for its first year of operations. The company produced 40,000 units and sold 32,000 units at a price of $130 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses Exercise 6-3 (Algo) Part 1b 1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing. Income Statement (Absorption Costing) Sales Cost of goods sold Gross prof Selling and administrative expenses Income S S $ 54 per unit. $ 20 per unit $6 per unit $ 440,000 per year $ 11 per unit $ 110,000 per year 4,160,000 2,912,000 1,248,000 352,000 896,000

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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1. COMPUTE THE UNIT PRODUCT COST UNDER ABSORPTION COSTING 2. COMPUTE THE UNIT PRODUCT COST UNDER VARIABLE COSTING
Use the information given in the image to prepare the Income Statement for March 2022 according to theabsorption costing method.
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