Problem 6-18 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements (LO6-1, LO6-2) Haas 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 24 16 $ 120,000 60,000 During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, It produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company's product is $52 per unit. Required: 1. Compute the company's break-even point in unit sales. 2. Assume the company uses varlable costing: 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. 3. Assume the company uses absorption costing: 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.
Problem 6-18 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements (LO6-1, LO6-2) Haas 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 24 16 $ 120,000 60,000 During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, It produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company's product is $52 per unit. Required: 1. Compute the company's break-even point in unit sales. 2. Assume the company uses varlable costing: 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. 3. Assume the company uses absorption costing: 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.
Chapter5: Process Costing
Section: Chapter Questions
Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...
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Prepare an income statement for Year 1, Year 2, and Year 3. Assume the company uses absorption costing. (Round your intermediate calculations to 2 decimal places.)
![Problem 6-18 (Algo) Variable and Absorption Costing Unit Product Costs and Income
Statements (LO6-1, LO6-2]
Haas 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
24
Direct labor
16
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expenses
$ 120,000
$ 60,000
During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations,
it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The
selling price of the company's product is $52 per unit.
Required:
1. Compute the company's break-even point in unit sales.
2. Assume the company uses variable costing:
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.
3. Assume the company uses absorption costing:
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F43ee94ef-72d6-420b-afde-dad6101e81bf%2F9ecf5b5c-8397-444b-b03c-2bb5c95fc1d5%2Fi96fryg_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 6-18 (Algo) Variable and Absorption Costing Unit Product Costs and Income
Statements (LO6-1, LO6-2]
Haas 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
24
Direct labor
16
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expenses
$ 120,000
$ 60,000
During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations,
it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The
selling price of the company's product is $52 per unit.
Required:
1. Compute the company's break-even point in unit sales.
2. Assume the company uses variable costing:
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.
3. Assume the company uses absorption costing:
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.
Transcribed Image Text:Req 1
Req 2A
Req 2B
Req 3A
Reg 3B
Prepare an income statement for Year 1, Year 2, and Year 3. Assume the company uses absorption costing. (Round your
intermediate calculations to 2 decimal places.)
Haas Company
Absorption Costing Income Statement
Year 1
Year 2
Year 3
Sales
Gross margin
Selling and administrative expenses
Net operating income (loss)
< Req 3A
Req 3B >
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