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1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: à. Compute the unit product cost. . Prepare an income statement for the year.

1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: à. Compute the unit product cost. . Prepare an income statement for the year.

FINANCIAL ACCOUNTING
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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Fantastic29 Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Direct materials: $12 per unit - Direct labor: $ 4 per unit - Manufacturing overhead costs: Variable: $2 per unit • Fixed: $370,000 - Selling and administrative costs: Variable: $2 per unit Fixed: $ 200,000 During the year, the company produced 37,000 units and sold 18,000 units. The selling price of the company's product is $55 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Prepare an income statement for the year. Assume that the company uses absorption costing.
Transcribed Image Text:Fantastic29 Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Direct materials: $12 per unit - Direct labor: $ 4 per unit - Manufacturing overhead costs: Variable: $2 per unit • Fixed: $370,000 - Selling and administrative costs: Variable: $2 per unit Fixed: $ 200,000 During the year, the company produced 37,000 units and sold 18,000 units. The selling price of the company's product is $55 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Prepare an income statement for the year. Assume that the company uses absorption costing.
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