Variable costs per unit: Manufacturing: Direct materials Direct labor $ 29 $ 21 Variable manufacturing overhead Variable selling and administrative $5 $1 Fixed costs per year: Fixed manufacturing overhead $ 330,000 $ 150,000 Fixed selling and administrative expenses During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75.000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company's product is $64 per unit. Required: 1. Compute the company's break-even point in unit sales. 2. Assume the company uses variable costing: 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. 3. Assume the company uses absorption costing 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. Complete this question by entering your answers in the tabs below.
Variable costs per unit: Manufacturing: Direct materials Direct labor $ 29 $ 21 Variable manufacturing overhead Variable selling and administrative $5 $1 Fixed costs per year: Fixed manufacturing overhead $ 330,000 $ 150,000 Fixed selling and administrative expenses During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75.000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company's product is $64 per unit. Required: 1. Compute the company's break-even point in unit sales. 2. Assume the company uses variable costing: 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. 3. Assume the company uses absorption costing 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. Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
2B
Transcribed Image Text:Variable costs per unit:
Manufacturing:
Direct materials
Direct labor
$ 29
$ 21
$5
Variable manufacturing overhead
Variable selling and administrative
$1
Fixed costs per year:
Fixed manufacturing overhead
$ 330,000
Fixed selling and administrative expenses
$ 150,000
During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it
produced 75,000 units and sold 50,000 units. In Its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of
the company's product is $64 per unit.
Required:
1. Compute the company's break-even point in unit sales.
2. Assume the company uses variable costing:
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.
3. Assume the company uses absorption costing:
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.
Complete this question by entering your answers in the tabs below.
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Req 1
Req 2A
Req 2B
Req 3A
Req 3B
Prepare an income statement for Year 1, Year 2, and Year 3. Assume the company uses variable costing.
Haas Company
Variable Costing Income Statement
Year 1
Year 2
Year 3
$4,160,000
Sales
$ 3,840,000
$3,200,000
Variable expenses:
Variable cost of goods sold
3,300,000
2,750,000
3,575,000
Variable selling and administrative
60,000
50,000
65,000
Total variable expenses
3,360,000
2,800,000
3,640,000
Contribution margin
480,000
400,000
520,000
Fixed expenses:
Fixed manufacturing overhead
330,000
330,000
330,000
Fixed selling and administrative
150,000
150,000
150,000
480,000
480,000 480,000
Net operating income (loss)
0 $ (80,000) $ 40,000
Req 3A >
$
< Req 2A
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education