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Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable cost per unit:
Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable cost per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Pixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ $ $ $ $ 20 12 7 3 $110,000 $ 50,000 During its first year of operations, Haas produced 40,000 units and sold 40,000 units. During its second year of operations, it produced 55,000 units and sold 30,000 units. In its third year, Haas produced 20,000 units and sold 45,000 units. The selling price of the company's product is $46 per unit. Required: 1. Compute the company's break-even point in units sold. Break-even unit sales 40,000 units 2. Assume the company uses variable costing: a. Compute unit product costs for Year 1, Year 2, and Year 3. Year 1 $ Year 2 Year 3 39 $ 39 $ Unit product cost 39 b. Prepare an income statement for year 1, year 2, and year 3. Haas Company Variable Costing Income Statement Year 1 1 Year 2 Year 3 Variable expenses: Total variable expenses Fixed expenses: Total fixed expenses: Net operating income (loss) 3. Assume the company uses absorption costing: a. Compute unit product costs for Year 1, Year 2, and Year 3. (Round your intermediate and final answers to 2 decimal places.) Year 1 Year 2 Year 3 Unit product cost b. Prepare an income statement for year 1, year 2, and year 3. (Round your intermediate calculations to 2 decimal places.) Haas Company Absorption Costing Income Statement Year 1 Year 2 Year 3 Net operating income (loss)
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