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 | $ | 80 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 3 |
| Fixed (per month) | $ | 564,000 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 18 |
| 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.
2. Assume that the company uses variable costing.
a. Determine the unit product cost.
b. Prepare a contribution format income statement for May.
Solutions
ekkarill92 answered 1 year 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
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...
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...
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