Question
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 |
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.)
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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