Question
Lynch Company manufactures and sells a single product. The following costs were incurred during the companys first year of operations: Variable costs per unit: Manufacturing:
Lynch Company manufactures and sells a single product. The following costs were incurred during the companys first year of operations:
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $ | 13 |
| Direct labor | $ | 10 |
| Variable manufacturing overhead | $ | 3 |
| Variable selling and administrative | $ | 3 |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 352,000 |
| Fixed selling and administrative | $ | 262,000 |
During the year, the company produced 32,000 units and sold 27,000 units. The selling price of the companys product is $56 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.
Lynch Company manufactures and sells a single product. The following costs were incurred during the companys first year of operations:
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $ | 13 |
| Direct labor | $ | 10 |
| Variable manufacturing overhead | $ | 3 |
| Variable selling and administrative | $ | 3 |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 352,000 |
| Fixed selling and administrative | $ | 262,000 |
During the year, the company produced 32,000 units and sold 27,000 units. The selling price of the companys product is $56 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.
Lynch Company manufactures and sells a single product. The following costs were incurred during the companys first year of operations:
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $ | 13 |
| Direct labor | $ | 10 |
| Variable manufacturing overhead | $ | 3 |
| Variable selling and administrative | $ | 3 |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 352,000 |
| Fixed selling and administrative | $ | 262,000 |
During the year, the company produced 32,000 units and sold 27,000 units. The selling price of the companys product is $56 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.
- Req 1A
- Req 1B
- Req 2A
- Req 2B
Compute the unit product cost. Assume that the company uses absorption costing.
1) Unit cost production=
2) Prepare an income statement for the year. Assume that the company is using absorption costing.
3) Compute the unit product cost. Assume that the company uses variable costing.
4) Prepare an income statement for the year. Assume that the company uses variable costing.
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