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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
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: 22 Variable costs per unit. Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Pixed manufacturing overhead Fixed selling and administrative expenses $540,000 $180,000 During its first year of operations, O'Brien produced 96,000 units and sold 78,000 units. During its second year of operations, it produced 82,000 units and sold 95,000 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 $77 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. U Req 1A Reg 1B UT- Compute the unit product cost COSI Unit Product Cost Year 1 Year 2 Year 3 Req 1A Reg 1B Reg za | 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: I . . . tes Total variable expenses + Fixed expenses: Total fixed expenses
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