turing overhead and administrative expenses $ 240,000 $ 80,000 ar of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year units and sold 50,000 units. The selling price of the company's product is $54 per unit. mpany uses absorption costing. Compute the unit product cost for Year 1 and our answer to 2 decimal places.
turing overhead and administrative expenses $ 240,000 $ 80,000 ar of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year units and sold 50,000 units. The selling price of the company's product is $54 per unit. mpany uses absorption costing. Compute the unit product cost for Year 1 and our answer to 2 decimal places.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Domestic
Transcribed Image Text:Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two 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
Unit product cost
During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it
produced 40,000 units and sold 50,000 units. The selling price of the company's product is $54 per unit.
$ 25
$ 10
Assume the company uses absorption costing. Compute the unit product cost for Year 1 and Year 2.
Note: Round your answer to 2 decimal places.
Year 1
Year 2
Walsh Company
Income Statement
$5
$4
$ 240,000
$ 80,000
$
Assume the company uses absorption costing. Prepare an income statement for Year 1 and Year 2
Note: Round your intermediate calculations to 2 decimal places.
Year 1
Net operating income (loss)
Reconcile the difference between variable costing and absorption costing net operating income in Year 1.
Note: Enter any losses or deductions as a negative value.
0 S
Year 2
0
Variable costing net operating income (loss)
Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption
costing
Absorption costing net operating income (loss)
Year 1
Year 2
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