Haas Company manufactures and sells one product. The following information pertains to each of the company's...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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 Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 30 18 6 3 $960,000 $240,000 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'Slows product is $87 per unit. Go to Settings to activate Wir 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 inte W requirement 1. Which net operating income figures seem counterintuitive? Why? Go to Settings 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 Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 30 18 6 3 $960,000 $240,000 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'Slows product is $87 per unit. Go to Settings to activate Wir 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 inte W requirement 1. Which net operating income figures seem counterintuitive? Why? Go to Settings
Expert Answer:
Answer rating: 100% (QA)
1 Compute the companys breakeven point in units sold First calculate the contribution margin per unit Contribution Margin per Unit Selling Price per Unit Variable Cost per Unit 87 30 18 6 3 30 Next ca... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0077522940
15th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
Haas Company manufactures and sells one product. The following information pertains to each of the companys first three years of operations: Variable costs per unit: Manufacturing: Direct materials ....
-
Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable costs per unit: Manufacturing: Direct materials...
-
We have introduced the concept of phase encoding as a separate means to image the spatial distribution of p(r) orthogonal to the read gradient. However, it can also be used to replace the read...
-
The Dell Corporation borrowed $10,000,000 at 7% interest per year, which must be repaid in equal EOY amounts (including both interest and principal) over the next six years. How much must Dell repay...
-
Explain relationships between market share liability and service liability.
-
The warrants of Integra Life Sciences allow the holder to buy a share of stock at $11.75 and are selling for $2.85. The stock price is currently $8.50. To what price must the stock go for the warrant...
-
The traveling salesman problem can be represented as finding a Hamilton cycle of least weight on a weighted graph. a. True b. False
-
a. Draw the network diagram for this problem. b. Implement the model for this problem in your spreadsheet and solve it. c. How much fuel should US Express purchase at each departure point and what is...
-
ABC is going to pay an annual dividend of $2.60 a share on its common stock a year from now. Yesterday, the company paid a dividend of $2.50 a share. The company adheres to a constant rate of growth...
-
For a child i living in a particular a school district, let voucheri be a dummy variable equal to one if a child is selected to participate in a school voucher program, and let scorei be that child's...
-
A higher margin of safety is desirable. It indicates that there is less risk of business losses. True False
-
(a) Show that the hypotheses "If you send me a WhatsApp message, then I will finish writing the Matlab program," "If you do not send me a WhatsApp message, then I will go to the cafe early" and "If I...
-
In the definition of culture, the key words are values, belief , idea and feelings a) Explain how each of those words fit in the definition of culture. b) Discuss the importance of those words in the...
-
How has the proportion of debt financing and equity financing changed over the years? (Compared to the average in the market). Is the corporation experiencing favorable or unfavorable financial...
-
Bilko and co. sells patented Industrial Sealant. It determines that its elasticity of demand is -2 and its marginal cost is $5 per unit. It has been charging $10 per unit. It should [Select] its...
-
Find the errors in the following code, and make the program be compiled without errors. #include using namespace std; int main() { } int a=20,b=3; float *ptrf, varf =3.14, c=25.0; int num =3, *ptri =...
-
You're given that fedx = 51.880 (to three decimal places). Using properties of definite integrals and exponentials, find 2e(+3) dx A. 224.273 B. -143.931 C. Can't tell from the information given. D....
-
Using the information in P11-2B, compute the overhead controllable variance and the overhead volume variance. Data From Problem 11-2B: Huang Company uses a standard cost accounting system to account...
-
Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his divisions...
-
Many companies use budgets for three purposes. First, they use them to plan how to deploy resources to best serve customers. Second, they use them to establish challenging goals, or stretch targets,...
-
Assume that you work for an airline unloading luggage from airplanes. Your boss has said that, on average, each airplane contains 100 pieces of luggage. Furthermore, your boss has stated that you...
-
Comprehensive analysis (Learning Objectives 2, 3, 4) Todd Department Stores chief executive officer (CEO) has asked you to compare the companys profit performance and financial position with the...
-
Effect of transactions on ratios (Learning Objective 4) Financial statement data of Yankee Traveler magazine include the following items (dollars in thousands): Requirements 1. Compute Yankee...
-
Ratio analysis over two years (Learning Objective 4) Comparative financial statement data of Weinstein, Inc., follow. 1. Market price of Weinsteins common stock: $49.00 at December 31, 2009, and...
Study smarter with the SolutionInn App