1). 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	$	26
Direct labor	$	18
Variable manufacturing overhead	$	6
Variable selling and administrative	$	3
Fixed costs per year:
Fixed manufacturing overhead	$	390,000
Fixed selling and administrative expenses	$	150,000

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 companys product is $62 per unit.

Required:

1a. Compute the companys break-even point in unit sales.

1b. Assume the company uses variable costing:

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

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

1e. Assume the company uses absorption costing:

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

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

2.

Royal Lawncare Company produces and sells two packaged productsWeedban and Greengrow. Revenue and cost information relating to the products follow:

	Product
	Weedban		Greengrow
Selling price per unit	$	11.00	$	37.00
Variable expenses per unit	$	3.10	$	11.00
Traceable fixed expenses per year	$	137,000	$	50,000

Common fixed expenses in the company total $112,000 annually. Last year the company produced and sold 37,000 units of Weedban and 15,000 units of Greengrow.

Required:

Prepare a contribution format income statement segmented by product lines.

3.

Walsh Company manufactures and sells one product. The following information pertains to each of the companys first two years of operations:

Variable costs per unit:
Manufacturing:
Direct materials	$	20
Direct labor	$	13
Variable manufacturing overhead	$	4
Variable selling and administrative	$	3
Fixed costs per year:
Fixed manufacturing overhead	$	320,000
Fixed selling and administrative expenses	$	70,000

During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the companys product is $83 per unit.

Required:

3a. Assume the company uses variable costing:

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

3c. Prepare an income statement for Year 1 and Year 2.

3d. Assume the company uses absorption costing:

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

3f. Prepare an income statement for Year 1 and Year 2.

3g. Reconcile the difference between variable costing and absorption costing net operating income in Year 1.