90.2K

Verified Solution

Link Copied!

Required information Required information

Case $6-29($Algo$)$ Varlable and Absorption Costing Unit Product Costs and Income Statements $[$LO$6-1.$

LO$6-2]$

$[$The following informotion opplies to the questions disployed below.$]$

O'Brien Company manufactures and sells one product. The following information pertains to each of the company's first

three years of operations:Manufacturing: Direct labor $ $18$Variable selling and administrative $$4$

Fixed costs per year:Fixed selling and adninistrative expenses $ $18$e$,$eeeDuring its first yesr of operations, O'Brien produced $95,000$ units and sold $72,000$ units. During its second year of

operations, it produced $76,000$ units and sold $94,000$ units. In its third yesr, O'Brien produced $88,000$ units and sold

$83,000$ units. The selling price of the company's product is $$77$ per unit.

Case $6-29$ Part$-2($Algo$)$

Assume the company uses variable costing and a LIFO inventory flow assumption $($LIFO means last$-$in first$-$out; in other words, it

assumes the newest units in inventory are sold first$)$:

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.

Required $2$ A

Required $2B$

Prepare an income statement for Year $1,$ Year $2,$ and Year $3.$

Case $6-29($Algo$)$ Varlable and Absorption Costing Unit Product Costs and Income Statements $[$LO$6-1.$

LO$6-2]$

$[$The following informotion opplies to the questions clisployed below.$]$

O'Brien Company manufactures and sells one product. The following information pertains to each of the company's first

three years of operations:Manufacturing: Direct labor $ $$18$Variable selling and administrative $ $4$

Fixed costs per year:Fixed selling and adninistrative expenses $ $180,$ee$$During its first year of operations, O'Brien produced $95,000$ units and sold $72,000$ units. During its second year of

operations, it produced $76,000$ units and sold $94,000$ units. In its third yesr, O'Brien produced $88,000$ units and sold

$83,000$ units. The selling price of the company's product is $$77$ per unit.

Case $6-29$ Part$-2($Algo$)$

Assume the company uses variable costing and a LIFO inventory flow assumption $($LIFO means last$-$in first$-$out; in other words, it$.$

assumes the newest units in inventory are sold first$)$:

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.

Required $2$ A

Required $2B$

Compute the unit product cost for Year $1,$ Year $2,$ and Year $3.$

Show all imagesShow all images

Answer & Explanation Solved by verified expert

See Answer