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A: Compute the unit product cost for Year 1, Year 2, and Year 3. (Round your intermediate calculations and final answers to 2 decimal places.) Unit Product Cost Year 1 Year 2 Year 3 3B: Prepare an income statement for Year 1, Year 2, and Year 3. (Round your intermediate calculations to 2 decimal places.) O’Brien Company Absorption Costing Income Statement Year 1 Year 2 Year 3

A: Compute the unit product cost for Year 1, Year 2, and Year 3. (Round your intermediate calculations and final answers to 2 decimal places.) Unit Product Cost Year 1 Year 2 Year 3 3B: Prepare an income statement for Year 1, Year 2, and Year 3. (Round your intermediate calculations to 2 decimal places.) O’Brien Company Absorption Costing Income Statement Year 1 Year 2 Year 3

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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CS_3_LA_QA3

3A: Compute the unit product cost for Year 1, Year 2, and Year 3. (Round your intermediate calculations and final answers to 2 decimal places.)

 
 
 
 
  Unit Product Cost
Year 1  
Year 2  
Year 3  

3B: Prepare an income statement for Year 1, Year 2, and Year 3. (Round your intermediate calculations to 2 decimal places.)

 
 
 
 
O’Brien Company
Absorption Costing Income Statement
  Year 1 Year 2 Year 3
       
       
       
       
       

 

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 28 Direct labor 15 Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses 4 4 $530,000 $100,000 During its first year of operations, O'Brien produced 93,000 units and sold 77,000 units. During its second year of operations, it produced 83,000 units and sold 94,000 units. In its third year, O'Brien produced 89,000 units and sold 84,000 units. The selling price of the company's product is $79 per unit. 3. Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In other words, it assumes that the oldest 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.
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 28 Direct labor 15 Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses 4 4 $530,000 $100,000 During its first year of operations, O'Brien produced 93,000 units and sold 77,000 units. During its second year of operations, it produced 83,000 units and sold 94,000 units. In its third year, O'Brien produced 89,000 units and sold 84,000 units. The selling price of the company's product is $79 per unit. 3. Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In other words, it assumes that the oldest 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.
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