Question
In: Accounting
High Country, Inc., produces and sells many recreational products. The company has just opened a new...
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
| Beginning inventory | 0 | |
| Units produced | 46,000 | |
| Units sold | 41,000 | |
| Selling price per unit | $ | 75 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 4 |
| Fixed (per month) | $ | 561,000 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 17 |
| Direct labor cost per unit | $ | 6 |
| Variable manufacturing overhead cost per unit | $ | 3 |
| Fixed manufacturing overhead cost (per month) | $ | 782,000 |
Management is anxious to assess the profitability of the new camp cot during the month of May.
Required:
1. Assume that the company uses absorption costing.
a. Determine the unit product cost.
b. Prepare an income statement for May.
|
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2. Assume that the company uses variable costing.
a. Determine the unit product cost.
b. Prepare a contribution format income statement for May.
|
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Solutions
ekkarill92 answered 2 years agoRelated Solutions
High Country, Inc., produces and sells many recreational products. The company has just opened a new...
High Country, Inc., produces and sells many recreational
products. The company has just opened a new plant to produce a
folding camp cot that will be marketed throughout the United
States. The following cost and revenue data relate to May, the
first month of the plant’s operation:
Beginning inventory
0
Units produced
36,000
Units sold
31,000
Selling price per unit
$
77
Selling and administrative expenses:
Variable per unit
$
3
Fixed (per month)
$
561,000
Manufacturing costs:
Direct materials...
High Country, Inc., produces and sells many recreational products. The company has just opened a new...
High Country, Inc., produces and sells many recreational
products. The company has just opened a new plant to produce a
folding camp cot that will be marketed throughout the United
States. The following cost and revenue data relate to May, the
first month of the plant’s operation:
Beginning
inventory
0
Units
produced
46,000
Units sold
41,000
Selling price
per unit
$
80
Selling and
administrative expenses:
Variable per
unit
$
3
Fixed (per
month)
$
564,000
Manufacturing
costs:
Direct materials...
High Country, Inc., produces and sells many recreational products. The company has just opened a new...
High Country, Inc., produces and sells many recreational
products. The company has just opened a new plant to produce a
folding camp cot that will be marketed throughout the United
States. The following cost and revenue data relate to May, the
first month of the plant’s operation:
Beginning inventory
0
Units produced
40,000
Units sold
35,000
Selling price per unit
$
78
Selling and administrative expenses:
Variable per unit
$
4
Fixed (per month)
$
557,000
Manufacturing costs:
Direct materials...
High Country, Inc., produces and sells many recreational products. The company has just opened a new...
High Country, Inc., produces and sells many recreational
products. The company has just opened a new plant to produce a
folding camp cot that will be marketed throughout the United
States. The following cost and revenue data relate to May, the
first month of the plant’s operation:
Beginning inventory
0
Units produced
37,000
Units sold
32,000
Selling price per unit
$
80
Selling and administrative
expenses:
Variable per unit
$
2
Fixed (per month)
$
565,000
Manufacturing costs:
Direct materials...
High Country, Inc., produces and sells many recreational products. The company has just opened a new...
High Country, Inc., produces and sells many recreational
products. The company has just opened a new plant to produce a
folding camp cot that will be marketed throughout the United
States. The following cost and revenue data relate to May, the
first month of the plant’s operation: Beginning inventory 0 Units
produced 38,000 Units sold 33,000 Selling price per unit $ 82
Selling and administrative expenses: Variable per unit $ 3 Fixed
(per month) $ 563,000 Manufacturing costs: Direct materials...
High Country, Inc., produces and sells many recreational products. The company has just opened a new...
High Country, Inc., produces and sells many recreational
products. The company has just opened a new plant to produce a
folding camp cot that will be marketed throughout the United
States. The following cost and revenue data related to May, the
first month of the plant’s operation:
Beginning inventory
0
Units produced
47,000
Units sold
42,000
Selling price per unit
$
85
Selling and administrative expenses:
Variable per unit
$
2
Fixed (per month)
$
561,000
Manufacturing costs:
Direct materials...
High Country, Inc., produces and sells many recreational products. The company has just opened a new...
High Country, Inc., produces and sells many recreational
products. The company has just opened a new plant to produce a
folding camp cot that will be marketed throughout the United
States. The following cost and revenue data relate to May, the
first month of the plant’s operation: Beginning inventory 0 Units
produced 46,000 Units sold 41,000 Selling price per unit $ 79
Selling and administrative expenses: Variable per unit $ 3 Fixed
(per month) $ 557,000 Manufacturing costs: Direct materials...
High Country, Inc., produces and sells many recreational products. The company has just opened a new...
High Country, Inc., produces and sells many recreational
products. The company has just opened a new plant to produce a
folding camp cot that will be marketed throughout the United
States. The following cost and revenue data relate to May, the
first month of the plant’s operation:
Beginning inventory
0
Units produced
47,000
Units sold
42,000
Selling price per unit
$
76
Selling and administrative
expenses:
Variable per unit
$
2
Fixed (per month)
$
564,000
Manufacturing costs:
Direct materials...
High Country, Inc., produces and sells many recreational products. The company has just opened a new...
High Country, Inc., produces and sells many recreational
products. The company has just opened a new plant to produce a
folding camp cot that will be marketed throughout the United
States. The following cost and revenue data relate to May, the
first month of the plant’s operation:
Beginning inventory
0
Units produced
40,000
Units sold
35,000
Selling price per unit
$
76
Selling and administrative
expenses:
Variable per unit
$
4
Fixed (per month)
$
567,000
Manufacturing costs:
Direct materials...
High Country, Inc., produces and sells many recreational products. The company has just opened a new...
High Country, Inc.,
produces and sells many recreational products. The company has just
opened a new plant to produce a folding camp cot that will be
marketed throughout the United States. The following cost and
revenue data relate to May, the first month of the plant’s
operation:
Beginning
inventory
0
Units
produced
37,000
Units sold
32,000
Selling price
per unit
$
81
Selling and
administrative expenses:
Variable per
unit
$
2
Fixed (per
month)
$
555,000
Manufacturing
costs:
Direct materials...
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