[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: Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses Direct materials Direct labor During its first year of operations, O'Brien produced 96,000 units and sold 77,000 units. During its second year of operations, it produced 84,000 units and sold 98,000 units. In its third year, O'Brien produced 82,000 units and sold 77,000 units. The selling price of the company's product is $71 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. Required: 1. Assume the company uses variable 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): Req 1A Year 1 Year 2 Year 3 Complete this question by entering your answers in the tabs below. Compute the unit product cost for Year 1, Year 2, and Year 3. Unit Product Cost Req 1A Req 1B Complete this question by entering your answers in the tabs below. Prepare an income statement for Year 1, Year 2, and Year 3. O'Brien Company Variable Costing Income Statement Year 1 Variable expenses: Req 1B Fixed expenses: Total variable expenses Total fixed expenses $ 29 $ 15 $6 $2 $ 550,000 $ 130,000 $ 0 0 0 0 $ Year 2 0 0 0 0 $ Year 3 0 0 0 0
[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: Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses Direct materials Direct labor During its first year of operations, O'Brien produced 96,000 units and sold 77,000 units. During its second year of operations, it produced 84,000 units and sold 98,000 units. In its third year, O'Brien produced 82,000 units and sold 77,000 units. The selling price of the company's product is $71 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. Required: 1. Assume the company uses variable 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): Req 1A Year 1 Year 2 Year 3 Complete this question by entering your answers in the tabs below. Compute the unit product cost for Year 1, Year 2, and Year 3. Unit Product Cost Req 1A Req 1B Complete this question by entering your answers in the tabs below. Prepare an income statement for Year 1, Year 2, and Year 3. O'Brien Company Variable Costing Income Statement Year 1 Variable expenses: Req 1B Fixed expenses: Total variable expenses Total fixed expenses $ 29 $ 15 $6 $2 $ 550,000 $ 130,000 $ 0 0 0 0 $ Year 2 0 0 0 0 $ Year 3 0 0 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
![[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:
Variable manufacturing overhead
Variable selling and administrative
Direct materials.
Direct labor
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expenses
During its first year of operations, O'Brien produced 96,000 units and sold 77,000 units. During its second year of
operations, it produced 84,000 units and sold 98,000 units. In its third year, O'Brien produced 82,000 units and sold
77,000 units. The selling price of the company's product is $71 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.
Year 1
Year 2
Year 3
Required:
1. Assume the company uses variable 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):
Req 1A
Complete this question by entering your answers in the tabs below.
Compute the unit product cost for Year 1, Year 2, and Year 3.
Unit Product
Cost
Req 1A
Req 1B
Complete this question by entering your answers in the tabs below.
Prepare an income statement for Year 1, Year 2, and Year 3.
O'Brien Company
Variable Costing Income Statement
Year 1
Variable expenses:
Req 1B
Fixed expenses:
Total variable expenses
Total fixed expenses
$ 29
$ 15
$6
$2
$ 550,000
$ 130,000
$
0
0
0
0 $
Year 2
0
0
0
0
$
Year 3
0
0
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F27c9ffc8-caf5-4a01-9236-94db3faf410c%2F4fd9c336-fb12-4ce9-8d48-53671f641450%2Fwnsfbmg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[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:
Variable manufacturing overhead
Variable selling and administrative
Direct materials.
Direct labor
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expenses
During its first year of operations, O'Brien produced 96,000 units and sold 77,000 units. During its second year of
operations, it produced 84,000 units and sold 98,000 units. In its third year, O'Brien produced 82,000 units and sold
77,000 units. The selling price of the company's product is $71 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.
Year 1
Year 2
Year 3
Required:
1. Assume the company uses variable 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):
Req 1A
Complete this question by entering your answers in the tabs below.
Compute the unit product cost for Year 1, Year 2, and Year 3.
Unit Product
Cost
Req 1A
Req 1B
Complete this question by entering your answers in the tabs below.
Prepare an income statement for Year 1, Year 2, and Year 3.
O'Brien Company
Variable Costing Income Statement
Year 1
Variable expenses:
Req 1B
Fixed expenses:
Total variable expenses
Total fixed expenses
$ 29
$ 15
$6
$2
$ 550,000
$ 130,000
$
0
0
0
0 $
Year 2
0
0
0
0
$
Year 3
0
0
0
0
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