Required Information

$[$The following informotion opplies to the questions clisployed below.$]$

O'Brien Company manufactures and sells one product. The following information pertains to each of the company's first

three years of operations:

During its first yesr of operstions, O'Brien produced $95,000$ units and sold $72,000$ units. During its second year of

operations, it produced $78,000$ units and sold $96,000$ units. In its third year, O'Brien produced $81,000$ units and sold

$76,000$ units. The selling price of the compony's product is $$75$ per unit.

Requlred:

I. Assume the compony uses variable costing ond o FIFO inventory flow sssumption $($FIFO means first$-$in first$-$out. In other words, it

sssumes thst the oldest units in inventory are sold first$)$:

a$.$ Compute the unit product cost for Year $1,$ Year $2,$ and Year $3.$

b$.$ Prepore on income statement for Year $1,$ Year $2,$ and Year $3.$