Waterway Manufacturing produces basketballs used for indoor and outdoor games. The company has had significant troubles over the past few years, as the number of competitors in the basketball market has increased dramatically. Recently, the company was forced to cut back production in order to reduce its rising inventory level. The following is a list of costs for the company in 2022: Variable costs per unit Rubber $2.70 Other materials-indirect 1.30 Ball makers-direct labour 5.50 Factory electricity usage 0.50 Factory water usage 0.15 Other labour-indirect 0.26 Selling and administrative expenses 0.40 Fixed costs per year Factory property taxes $135,695 Factory sewer usage 56,500 Factory electricity usage 45,200 Selling and administrative expenses 93,790 Waterway Manufacturing had an ending inventory of 96,050 basketballs in 2021. For these units, the fixed manufacturing overhead cost was $4.00 per unit and variable manufacturing costs were $9.62 per unit. In 2022, the company produced 39,500 basketballs, sold 81,900 basketballs, and had an ending inventory of 53,650 basketballs. The basketballs sold for $20.00 each. Waterway uses the FIFO method. Calculate Waterway' manufacturing cost per unit under a variable-costing system. (Round per unit calculations and final answer to 2 decimal places, e.g. 15.25.) Manufacturing cost $ 10.41 per unit Prepare a variable-costing income statement for 2022. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 125.) WATERWAYMANUFACTURING Variable-Costing Income Statement For the Year Ended December 31, 2022 Sales in units Sales $ Less : Variable costs Beginning inventory $ Cost of goods manufactured Cost of goods available for sale Ending inventory Variable costs Variable selling and administrative - Contribution margin Less : Fixed costs Fixed manufacturing overhead Fixed selling and administrative Operating income $ Calculate the manufacturing cost per unit under a throughput-costing system. (Round answer to 2 decimal places, e.g. 15.25.) Manufacturing cost $ per unit Prepare a throughput-costing income statement for 2022. Assume that increased costs in 2022 are related to variable costs other than materials. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e.g. 125.) WATERWAYMANUFACTURING Throughput Costing-Income Statement For the Year Ended December 31, 2022 Sales in units Sales Less : Throughput cost of goods sold Throughput contribution margin Less: Operating expenses Variable cost of goods sold $ Variable selling and administrative expense Fixed manufacturing, selling and administrative costs Net income before tax Calculate Waterway' manufacturing cost per unit under absorption costing. (Round per unit calculations and final answer to 2 decimal places, e.g. 15.25.) 2021 2022 Manufacturing cost $ per unit $ per unit Prepare an absorption-costing income statement for 2022. WATERWAYMANUFACTURING Absorption-Costing Income Statement For the Year Ended December 31, 2022 a Sales in units Sales $ Less : Cost of goods sold Beginning Inventory $ Cost of goods available for sale . Ending inventory Gross margin Less Variable selling and administrative costs Fixed selling and administrative Operating income Waterway' chief financial officer, Mr. Paul, is contemplating the benefits of using the absorption-costing and variable-costing approaches. He has asked you to perform a variety of tasks to help him analyze the differences between the two approaches: 1. Reconcile the differences between the income values of the two approaches. Reconciliation of net income Variable-costing net income $ FMOH deferred in ending inventory FMOH released from beginning inventory Absorption-costing net income $ 2. Mr. Paul has heard that some basic managerial tasks can be better performed when variable costing is used. Calculate the break-even point in units for the company in 2022 using the variable-costing data. (Round answer to 0 decimal places, e.g. 5,275.) Break-even point units
