Zola Company manufactures and sells one product. The following information pertains to the company’s first year of operations: Variable cost per unit: Direct materials $ 19 Fixed costs per year: Direct labor $ 317,250 Fixed manufacturing overhead $ 320,000 Fixed selling and administrative expenses $ 92,500 The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Zola produced 23,500 units and sold 18,800 units. The selling price of the company’s product is $66.60 per unit. Required: 1. Assume the company uses super-variable costing: a. Compute the unit product cost for the year. b. Prepare an income statement for the year.
Zola Company manufactures and sells one product. The following information pertains to the company’s first year of operations: Variable cost per unit: Direct materials $ 19 Fixed costs per year: Direct labor $ 317,250 Fixed manufacturing overhead $ 320,000 Fixed selling and administrative expenses $ 92,500 The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Zola produced 23,500 units and sold 18,800 units. The selling price of the company’s product is $66.60 per unit. Required: 1. Assume the company uses super-variable costing: a. Compute the unit product cost for the year. b. Prepare an income statement for the year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Zola Company manufactures and sells one product. The following information pertains to the company’s first year of operations:
| Variable cost per unit: | ||
| Direct materials | $ | 19 |
| Fixed costs per year: | ||
| Direct labor | $ | 317,250 |
| Fixed manufacturing overhead | $ | 320,000 |
| Fixed selling and administrative expenses | $ | 92,500 |
The company does not incur any variable
Required:
1. Assume the company uses super-variable costing:
a. Compute the unit product cost for the year.
b. Prepare an income statement for the year.
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