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Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statement under absorption costing for external reporting.

Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statement under absorption costing for external reporting. For its first month of operations, 325 bikes were produced and 215 were sold. Income statement information under variable costing follows.

Sales (215 $1,775) $ 381,625
Variable cost of goods sold (215 $650) 139,750
Variable selling and administrative expenses (215 $50) 10,750
Contribution margin 231,125
Fixed overhead 58,500
Fixed selling and administrative expenses 85,000
Income $ 87,625

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Huds Incorporated reports the information below on its product. The company uses absorption costing and has a target markup of 40% of absorption cost per unit.

Direct materials $ 102 per unit
Direct labor $ 32 per unit
Variable overhead $ 10 per unit
Fixed overhead $ 192,000 per year
Variable selling and administrative expenses $ 4 per unit
Fixed selling and administrative expenses $ 125,000 per year
Units produced 48,000 units per year
Units sold 48,000 units per year

Compute the target selling price per unit under absorption costing. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

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Prepare the company's income statement under absorption costing. HAYEK BIKES Income Statement (Absorption Costing) 0 0 $ Product cost per unit using absorption costing Target markup per unit Target selling price per unit Per unit

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