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CoursHeroTranscribedText: PROBLEM 8-17 Variable and Absorption Costing Unit Product Costs and Income Statements |9 LO1, 2 LO2, 2 L03, 2 LO4) Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable cost per unit: Manufacturing: Direct materials S 30 Direct labour 18 Variable manufacturing overhead 6 Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead $960,000 Fixed selling and administrative expenses $240,000During 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 $87 per unit. Required: 1. Compute the company's break-even point in units sold. 2. Assume the company uses variable costing: a. Compute unit product costs 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 unit product costs for Year 1. Year 2, and Year 3. b. Prepare an income statement for Year 1. Year 2, and Year 3. 4. Compare net income operating income figures that you computed in requirements 2 and 3 to the break even point calculated in requirement 1. Which net operating income figures seem counterintuitive? Why? Page 334

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