Question
Campbell & Orlich Industries C&O Industries is an innovative technology company that designs, produces, manufactures, and distributes chip wafers used in the semiconductor manufacturing processes
Campbell & Orlich Industries C&O Industries is an innovative technology company that designs, produces, manufactures, and distributes chip wafers used in the semiconductor manufacturing processes of firms such as NVIDIA, Micron Technology, and AMD. It has concentrated its operations to the point where it is taking advantage of full scale economies afforded by producing a single product for its entire operational base: WAFX470. Since there is a very strong market for the companys product split between three customers, expectation are running high that C&O will be running at full capacity for the next several years and may undertake steps to increase its capacity to meet escalating demand; the major concern being product quality as management desires wafer specification to be within 1/1,000,000,000 of a micron. Over the past three years of operations, which were the first three years of existence for the organization, the following data were relevant to operations: Per Unit Variable Costs: Manufacturing: DM DL MO-Variable Selling & Administrative Annual Fixed Costs: Manufacturing Overhead Selling & Administrative Costs $30 $18 $6 $4 $600,000 $180,000 C&O sells its chip wafer for $70/unit for which the following data pertain to the operational relationship between production and sales: Year 1 2 3 Production (Units) 100,000 75,000 80,000 Sales (Units) 80,000 90,000 75,000 Requirement #1: The cost flow assumption is assumed to be FIFO (oldest Units sold first) and Variable Costing is to be used. A. You are to calculate the per unit cost for each of the three years being discussed B. You are to prepare an income statement for each of the three years being discussed Requirement #2: The cost flow assumption is assumed to be LIFO (newest Units sold first) and Variable Costing is to be used. A. You are to calculate the per unit cost for each of the three years being discussed B. You are to prepare an income statement for each of the three years being discussed C. Explain the reason for the unusual results between requirements 1&2 above Requirement #3: The cost flow assumption is assumed to be FIFO (oldest Units sold first) and Absorption Costing is to be used. A. You are to calculate the per unit cost for each of the three years being discussed B. You are to prepare an income statement for each of the three years being discussed Requirement #4: The cost flow assumption is assumed to be LIFO (newest Units sold first) and Absorption Costing is to be used. A. You are to calculate the per unit cost for each of the three years being discussed B. You are to prepare an income statement for each of the three years being discussed
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