Exercise 7-1 (Algo) Variable and Absorption Costing Unit Product Costs (L07-11 Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $938. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold 23,000 20,000 Units in ending inventory 3,000 Variable costs per unit: Direct materials $ 290 Direct labor $ 410 Variable manufacturing overhead $ 58 Variable selling and administrative Fixed costs: Fixed manufacturing overhead $ 910,000 Fixed selling and administrative 5 830,000 Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan (Round your intermediate calculations and final answer to the nearest whole dollar amount.) 2. Assume that the company uses variable costing Compute the unit product cost for one gamelan. $20 1. Absorption costing unit product cost 2. Variable costing unit product cost Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor $ 15 Variable manufacturing overhead $ 5 Variable selling and administrative $1 $ 1 Fixed costs per year: Fixed manufacturing overhead $ 286,000 Fixed selling and administrative $ 196,000 During the year, the company produced 26,000 units and sold 22,000 units. The selling price of the company's product is $46 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year, Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2A Req 2B Compute the unit product cost. Assume that the company uses absorption costing. Unit product cost b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Prepare an income statement for the year. Assume that the company uses absorption costir Lynch Company Absorption Costing Income Statement manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative $ 5 $ 1 $ 1 $ 286,000 $ 196,000 During the year, the company produced 26,000 units and sold 22,000 units. The sell unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Reg 2B Compute the unit product cost. Assume that the company uses variable costing. Unit product cost Req 1A Reg 1B Req 2A Req 2B Prepare an income statement for the year. Assume that the company uses variable costing. Lynch Company Variable Costing Income Statement
