Dowell Company produces a single product. Its income statements under absorption costing for its first two...
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Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Income Statements (Absorption Costing) Sales ($52 per unit) Cost of goods sold ($36 per unit) Gross profit Selling and administrative expenses Income Additional Information a. Sales and production data for these first two years follow. Year 2 Year 1 $ 1,508,000 $ 2,756,000 1,044,000 1,908,000 464,000 366,000 848,000 462,000 $ 98,000 $ 386,000 Units Units produced Units sold Year 1 41,000 29,000 Year 2 41,000 53,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $36 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($451,000/41,000 units) Total product cost per unit $ 11 11 3 11 $ 36 Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Income Statements (Absorption Costing) Sales ($52 per unit) Cost of goods sold ($36 per unit) Gross profit Selling and administrative expenses Income Additional Information a. Sales and production data for these first two years follow. Year 2 Year 1 $ 1,508,000 $ 2,756,000 1,044,000 1,908,000 464,000 366,000 848,000 462,000 $ 98,000 $ 386,000 Units Units produced Units sold Year 1 41,000 29,000 Year 2 41,000 53,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $36 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($451,000/41,000 units) Total product cost per unit $ 11 11 3 11 $ 36
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