Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable cost per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses. Required: 1. Compute the company's break-even point in units sold. Break-even und sales S units 25 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. 4 2 $480,000 $360,000
Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable cost per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses. Required: 1. Compute the company's break-even point in units sold. Break-even und sales S units 25 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. 4 2 $480,000 $360,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of
operations:
Variable cost per unit:
Manufacturing:
Direct materials
Direct labour
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expenses
Required:
1. Compute the company's break-even point in units sold.
Break-even unit sales
S
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.
units
25
12
4
2
$480,000
$360,000
Transcribed Image Text:2. Assume the company uses variable costing:
a. Compute unit product costs for Year 1, Year 2, and Year 3.
Unit product cost
Variable expenses:
b. Prepare an income statement for year 1, year 2, and year 3.
Total variable expenses
Fixed expenses:
Total fixed expenses:
Net operating income (loss)
Unit product cost
Your 2
Year 1
Net operating income (loss)
Year 3
Haas Company
Varia Costing Income Statement
Year 1
Year 2
$
$
Your 3
Company
Absorption Costing Income Statement
Year 1
0
3. Assume the company uses absorption costing:
a. Compute unit product costs for Year 1, Year 2, and Year 3. (Round your intermediate and final answers to 2 decimal places.)
20
0
0 $
0
0 $
Year 2
b. Prepare an income statement for year 1, year 2, and year 3. (Round your Intermediate calculations to 2 decimal places.)
Year 2
0
0
0
0
0 $
0 $
Year 3
Year 3
0
0
0
0
0
0
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