Please give me all answers. I just need answers, not explanation. Problem 6-18 V
ID: 2570313 • Letter: P
Question
Please give me all answers. I just need answers, not explanation.
Problem 6-18 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: 25 17 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $150,000 $ 90,000 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 $57 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 3Explanation / Answer
Sales Price 57 Less: Variable Cost Direct Material 25 Direct Labor 17 Variable M.OH 8 Variable S&A 3 Contribution PU 4 Fixed Costs: Manufacturing OH 150000 S&A OH 90000 Total 240000 BEP 60000 (Total Fixed Cost/Contribution PU) Income Statement Under Variable Costing Particulars Year 1 Year 2 Year 3 Unit Cost Under Variable Costing Year 1 Year 2 Year 3 Units Produced 60000 75000 40000 Direct Material 25 25 25 Units Sold 60000 50000 65000 Direct Labor 17 17 17 Variable M.OH 8 8 8 Sales 3420000 2850000 3705000 Total Unit Cost 50 50 50 Less: Variable Cost Direct Material 1500000 1250000 1625000 Note: No Fixed OH are considered in Variable Costing Direct Labor 1020000 850000 1105000 Note: Selling & Administrative Costs are not part of Unit Costs Variable M.OH 480000 400000 520000 Variable S&A 180000 150000 195000 Contribution Margin 240000 200000 260000 Fixed Costs: Manufacturing OH 150000 150000 150000 S&A OH 90000 90000 90000 Net Income 0 -40000 20000 Income Statement Under Absorption Costing Particulars Year 1 Year 2 Year 3 Units Produced 60000 75000 40000 Unit Cost Under Absorption Costing Year 1 Year 2 Year 3 Units Sold 60000 50000 65000 Direct Material 25 25 25 Closing FG 0 25000 0 Direct Labor 17 17 17 Variable M.OH 8 8 8 Fixed M.OH 2.5 2 3.75 Total Unit Cost 52.50 52.00 53.75 Sales 3420000 2850000 3705000 Less: COGS: Opening Inventory: 0 0 1300000 Add: Cost of Goods Manufactured 3150000 3900000 2150000 Cost of Goods available for Sales 3150000 3900000 3450000 Less: Closing Inventory 0 1300000 0 COGS 3150000 2600000 3450000 Contribution Margin 270000 250000 255000 Less: Marketing & Admin Expenses Variable S&A 180000 150000 195000 Fixed S&A 90000 90000 90000 Net Income 0 10000 -30000