High Country, Incorporated, produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit Fixed (per month) Manufacturing costs: Required: 1. Assume that the company uses absorption costing. a. Calculate the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a. Calculate the unit product cost. b. Prepare a contribution format income statement for May. Direct materials cost per unit $ 17 Direct labor cost per unit $7 Variable manufacturing overhead cost per unit $3 Fixed manufacturing overhead cost (per month) $ 672,000 Management is anxious to assess the profitability of the new camp cot during the month of May. Req 1A 42,000 37,000 $ 77 Complete this question by entering your answers in the table below. Req 1B $3 $ 563,000 Req 2A Req 2B Prepare an income statement for May. Assume that the company uses absorption costing. High Country, Incorporated
High Country, Incorporated, produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit Fixed (per month) Manufacturing costs: Required: 1. Assume that the company uses absorption costing. a. Calculate the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a. Calculate the unit product cost. b. Prepare a contribution format income statement for May. Direct materials cost per unit $ 17 Direct labor cost per unit $7 Variable manufacturing overhead cost per unit $3 Fixed manufacturing overhead cost (per month) $ 672,000 Management is anxious to assess the profitability of the new camp cot during the month of May. Req 1A 42,000 37,000 $ 77 Complete this question by entering your answers in the table below. Req 1B $3 $ 563,000 Req 2A Req 2B Prepare an income statement for May. Assume that the company uses absorption costing. High Country, Incorporated
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:High Country, Incorporated, produces and sells many recreational products. The company has just opened a new plant to produce a
folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month
of the plant's operation:
Beginning inventory
Units produced
Units sold
Selling price per unit
Selling and administrative expenses:
Variable per unit.
Fixed (per month)
Manufacturing costs:
Required:
1. Assume that the company uses absorption costing.
a. Calculate the unit product cost.
b. Prepare an income statement for May.
2. Assume that the company uses variable costing.
a. Calculate the unit product cost.
b. Prepare a contribution format income statement for May.
Direct materials cost per unit
Direct labor cost per unit
Variable manufacturing overhead cost per unit
Fixed manufacturing overhead cost (per month)
Management is anxious to assess the profitability of the new camp cot during the month of May.
Req 1A
Req 1B
0
42,000
37,000
$ 77
Complete this question by entering your answers in the table below.
Req 2A
$3
$ 563,000
Req 2B
$ 17
$7
$ 3
$ 672,000
Prepare an income statement for May. Assume that the company uses absorption costing.
High Country, Incorporated
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