3-3, 8-4, 8-6)Great Outdoze Company manufactures sleeping bags, which sell for $66.10 each. The variable costs of production are as follows:Direct materialDirect laborVariable manufacturing overhead$19.1010.307.40Budgeted fixed overhead in 20x1 was $157,500 and budgeted production was 25,000 sleeping bags. The year's actual productionwas 25,000 units, of which 21,300 were sold. Variable selling and administrative costs were $1.30 per unit sold; fixed selling andadministrative costs were $22,000.Required:1. Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing.2-a. Prepare an operating income statement for the year using absorption costing.2-b. Prepare an operating income statement for the year using variable costing.3. Reconcile reported operating income under the two methods using the shortcut method.Complete this question by entering your answers in the tabs below.Req 1Req 2AReq 2BReg 3Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing. (Do not round intermediatecalculations. Round your final answers to 2 decimal places.)Product CostPer UnitAbsorption costingVariable costingReg 1Req :>< Prev3 of 3Next>Q Search or enter website name2:46.7UOPDGH.CIS'

Solution:- a)Calculation of unit product cost under absorption costing as follows:-

Answered: Great Outdoze Company manufactures…

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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as Great Outdoze Company manufactures sleeping bags, which sell for $67.00 each. The variable costs of production are as follows: $18.20 9.10 7.00 Direct material Direct labor Variable manufacturing overhead Budgeted fixed overhead in 20x1 was $160,000 and budgeted production was 20,000 sleeping bags. The year's actual production was 20,000 units, of which 16,700 were sold. Variable selling and administrative costs were $1.90 per unit sold; fixed selling and administrative costs were $25,000. Required: 1. Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing. 2-a. Prepare an operating income statement for the year using absorption costing. 2-b. Prepare an operating income statement for the year using variable costing. 3. Reconcile reported operating income under the two methods using the shortcut method.

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