Wu Equipment Company manufactures and distributes industrial air compres sors. The following costs are available for the year ended December 31, 2002. The company has no beginning inventory. In 2002, 1,500 units were produced, but only 1,200 units were sold. The unit selling price was $4.500. Costs and expenses were:

Instructions

(a) Compute the manufacturing cost of one unit of product using variable costing.

(b) Prepare a 2002 income statement for Wu Company using variable costing.

Transcribed Image Text:

Variable costs per unit Direct materials 800 Direct labor 1,500 Variable manufacturing overhead 300 Variable selling and administrative expenses 70 Annual fixed costs and expenses Manufacturing overhead $1,200,000 Selling and administrative expenses 100,000