Question
CompuDesk, Inc., makes an oak desk specially design for personal computers. The desk sells for $200. Data for last year's operations follow: Units in beginning
CompuDesk, Inc., makes an oak desk specially design for personal computers. The desk sells for $200. Data for last year's operations follow: Units in beginning inventory --- 0 Units produced ------------------- 10,000 Units sold -------------------------- 9,000 Units in ending inventory ------ 1,000 Variable costs per unit: Direct materials -------------------------- $ 60 Direct labor ----------------------------------- 30 Variable manufacturing overhead ----- 10 Variable selling and administrative --- 20 Total variable cost per unit --------- $ 120 Fixed costs: Fixed manufacturing overhead ------ $ 300,000 Fixed selling and administrative ------ 450,000 Total fixed costs ---------------------- $ 750,000 1) Assume that the company uses absorption costing. Compute the unit product cost for a (1) computer desk. 2) Assume that the company uses absorption costing. Prepare an income statement.
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