Required information

[The following information applies to the questions displayed below.]

OBrien Company manufactures and sells one product. The following information pertains to each of the companys first three years of operations:

Variable costs per unit:
Manufacturing:
Direct materials	$	28
Direct labor	$	15
Variable manufacturing overhead	$	3
Variable selling and administrative	$	4
Fixed costs per year:
Fixed manufacturing overhead	$	510,000
Fixed selling and administrative expenses	$	200,000

During its first year of operations, OBrien produced 91,000 units and sold 70,000 units. During its second year of operations, it produced 77,000 units and sold 93,000 units. In its third year, OBrien produced 82,000 units and sold 77,000 units. The selling price of the companys product is $78 per unit.

Required:

1. 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.

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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 each of the company's first three years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses A A A A 28 15 3 4 $ 510,000 $200,000 During its first year of operations, O'Brien produced 91,000 units and sold 70,000 units. During its second year of operations, it produced 77,000 units and sold 93,000 units. In its third year, O'Brien produced 82,000 units and sold 77,000 units. The selling price of the company's product is $78 per unit. Required: 1. 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. Req 1A Reg 1B Compute the unit product cost for Year 1, Year 2, and Year 3. Unit Product Cost Year 1 Year 2 Year 3 Reg 1A Reg 1B Prepare an income statement for Year 1, Year 2, and Year 3. O'Brien Company Variable Costing Income Statement Year 1 Year 2 Year 3 Variable expenses Total variable expenses Fixed expenses: Total fixed expenses