During Goodluck Company's first 2 years of operations, the company reported the following net income as follows: Year 1 Year 2 Sales @ $25 Cost of goods sold @ $18 Gross profit Selling and administrative expenses ($2 per unit variable; $130 fixed each year) per unit $1,000,000 $1.250,000 per unit (720,000) (900,000) 280,000 350,000 (210,000) (230,000) Net income 70,000 120,000 The company's $18 unit product cost is computed as follows: Direct materials $4 Direct labour $7 Variable Manufacturing overhead Fixed manufacturing overhead ($270,000 ÷ 45,000 units $1 $6 Production and cost data for the two years are Year 1 Year 2 Units produced 45,000 45,000 50,000 Units sold 40,000 Required: a) Compute the product cost. b) Prepare a variable costing contribution format income for Year 1 and Year 2

During Goodluck Company's first 2 years of operations, the company reported the following net income as follows: Year 1 Year 2 Sales @ $25 Cost of goods sold @ $18 Gross profit Selling and administrative expenses ($2 per unit variable; $130 fixed each year) per unit $1,000,000 $1.250,000 per unit (720,000) (900,000) 280,000 350,000 (210,000) (230,000) Net income 70,000 120,000 The company's $18 unit product cost is computed as follows: Direct materials $4 Direct labour $7 Variable Manufacturing overhead Fixed manufacturing overhead ($270,000 ÷ 45,000 units $1 $6 Production and cost data for the two years are Year 1 Year 2 Units produced 45,000 45,000 50,000 Units sold 40,000 Required: a) Compute the product cost. b) Prepare a variable costing contribution format income for Year 1 and Year 2

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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