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Required information [ The following information applies to the questions displayed below ] O'Brien Company manufactures and sells one product. The following information pertains to

Required information
[The following information applies to the questions displayed below]
O'Brien Company manufactures and sells one product. The following information pertains to each of the company's first
three years of operations:
Variable costs per unit:
Manufacturing:
Direct materials
Direct labor
Varect labor $27
Varle nanufacturlng overheadnthe
Variable manufacturing overhead $4
Variable selling and administrative $1
Fixed costs per year:
flxed manufacturing overhead $520,000
Fixed selling and administrative expenses $520,00e
,$110,0ee
During its first year of operations, O'Brien produced 93,000 units and sold 71,000 units. During its second year of
operations, it produced 77,000 units and sold 94,000 units. In its third year, O'Brien produced 86,000 units and sold
81,000 units. The selling price of the company's product is $80 per unit.
Required:
Assume the company uses variable costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In other words, it
assumes that the oldest units in inventory are sold first):
a. Compute the unit product cost for Year 1, Year 2, and Year 3
b. Prepare an income statement for Year 1, Year 2, and Year 3.
Complete this question by entering your answers in the tabs below.
Compute the unit product cost for Year 1, Year 2, and Year 3.
Req 1A
Req 1B
Prepare an income statement for Year 1, Year 2, and Year 3.
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