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: Variable costs per unit: Manufacturing: Direct materials 30 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses 14 4 2 $530,000 $140,000 During its first year of operations, O'Brien produced 90,000 units and sold 71,000 units. During its second year of operations, it produced 76,000 units and sold 90,000 units. In its third year, O'Brien produced 88,000 units and sold 83,000 units. The selling price of the company's product is $76 per unit. 2. Assume the company uses variable costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it assumes that the newest 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. Complete this question by entering your answers in the tabs below. Req 2A Req 2B
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: Variable costs per unit: Manufacturing: Direct materials 30 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses 14 4 2 $530,000 $140,000 During its first year of operations, O'Brien produced 90,000 units and sold 71,000 units. During its second year of operations, it produced 76,000 units and sold 90,000 units. In its third year, O'Brien produced 88,000 units and sold 83,000 units. The selling price of the company's product is $76 per unit. 2. Assume the company uses variable costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it assumes that the newest 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. Complete this question by entering your answers in the tabs below. Req 2A Req 2B
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter9: Working Capital
Section: Chapter Questions
Problem 20E
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Question
CS_3_QA2_PIR:
Req 2A: Compute the unit product cost for Year 1, Year 2, and Year 3.
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Req 2B: Prepare an income statement for Year 1, Year 2, and Year 3.
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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 the company's first
three years of operations:
Variable costs per unit:
Manufacturing:
Direct materials
30
Direct labor
14
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expenses
2
$530,000
$140,000
During its first year of operations, O'Brien produced 90,000 units and sold 71,000 units. During its second year of
operations, it produced 76,000 units and sold 90,000 units. In its third year, O'Brien produced 88,000 units and sold
83,000 units. The selling price of the company's product is $76 per unit.
2. Assume the company uses variable costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it
assumes that the newest 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.
Complete this question by entering your answers in the tabs below.
Req 2A
Req 2B](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb48b944a-de75-4d58-aa97-6215805e26f6%2Fcc2d798f-b5f5-4002-bf61-c9c150b28724%2F03em47o_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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:
Variable costs per unit:
Manufacturing:
Direct materials
30
Direct labor
14
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expenses
2
$530,000
$140,000
During its first year of operations, O'Brien produced 90,000 units and sold 71,000 units. During its second year of
operations, it produced 76,000 units and sold 90,000 units. In its third year, O'Brien produced 88,000 units and sold
83,000 units. The selling price of the company's product is $76 per unit.
2. Assume the company uses variable costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it
assumes that the newest 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.
Complete this question by entering your answers in the tabs below.
Req 2A
Req 2B
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