Question
In: Accounting
Exercise 6-6 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2] Lynch Company...
Exercise 6-6 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2]
Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations:
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $ | 11 |
| Direct labor | $ | 3 |
| Variable manufacturing overhead | $ | 1 |
| Variable selling and administrative | $ | 1 |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 330,000 |
| Fixed selling and administrative expenses | $ | 240,000 |
During the year, the company produced 30,000 units and sold 23,000 units. The selling price of the company’s product is $43 per unit.
Required:
1. Assume that the company uses absorption costing:
a. Compute the unit product cost.
b. Prepare an income statement for the year.
2. Assume that the company uses variable costing:
a. Compute the unit product cost.
b. Prepare an income statement for the year.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Exercise 6-6 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2] Lynch Company...
Exercise 6-6 Variable and Absorption Costing Unit Product Costs
and Income Statements [LO6-1, LO6-2]
Lynch Company manufactures and sells a single product. The
following costs were incurred during the company’s first year of
operations:
Variable costs per
unit:
Manufacturing:
Direct
materials
$ 13
Direct labor
$ 5
Variable
manufacturing overhead
$ 1
Variable selling
and administrative
$ 1
Fixed costs per
year:
Fixed
manufacturing overhead
$
320,000
Fixed
selling and administrative
$
230,000
During the year, the company...
Exercise 6-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3] Walsh...
Exercise 6-9 Variable and Absorption Costing Unit Product Costs
and Income Statements [LO6-1, LO6-2, LO6-3]
Walsh Company
manufactures and sells one product. The following information
pertains to each of the company’s first two years of
operations:
Variable costs
per unit:
Manufacturing:
Direct
materials
$
28
Direct
labor
$
16
Variable
manufacturing overhead
$
4
Variable selling
and administrative
$
3
Fixed costs per
year:
Fixed
manufacturing overhead
$
320,000
Fixed selling
and administrative expenses
$
100,000
During its first year...
Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3]...
Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product
Costs and Income Statements [LO6-1, LO6-2, LO6-3]
Walsh Company manufactures and sells one product. The following
information pertains to each of the company’s first two years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
23
Direct labor
$
16
Variable manufacturing overhead
$
4
Variable selling and administrative
$
3
Fixed costs per year:
Fixed manufacturing overhead
$
240,000
Fixed selling and administrative expenses
$
90,000
During its first...
Exercise 6-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3] Walsh...
Exercise 6-9 Variable and Absorption Costing Unit Product Costs
and Income Statements [LO6-1, LO6-2, LO6-3]
Walsh Company manufactures and sells one product. The following
information pertains to each of the company’s first two years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
27
Direct labor
$
12
Variable manufacturing overhead
$
4
Variable selling and administrative
$
3
Fixed costs per year:
Fixed manufacturing overhead
$
240,000
Fixed selling and administrative expenses
$
60,000
During its first year...
Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3]...
Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product
Costs and Income Statements [LO6-1, LO6-2, LO6-3]
Walsh Company manufactures and sells one product. The following
information pertains to each of the company’s first two years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
22
Direct labor
$
14
Variable manufacturing overhead
$
4
Variable selling and administrative
$
3
Fixed costs per year:
Fixed manufacturing overhead
$
400,000
Fixed selling and administrative expenses
$
70,000
During its first...
Exercise 6-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3] Walsh...
Exercise 6-9 Variable and Absorption Costing Unit Product Costs
and Income Statements [LO6-1, LO6-2, LO6-3]
Walsh Company manufactures and sells one product. The following
information pertains to each of the company’s first two years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
21
Direct labor
$
11
Variable manufacturing overhead
$
4
Variable selling and administrative
$
3
Fixed costs per year:
Fixed manufacturing overhead
$
320,000
Fixed selling and administrative expenses
$
70,000
During its first year...
Exercise 6-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3] Walsh...
Exercise 6-9 Variable and Absorption Costing Unit Product Costs
and Income Statements [LO6-1, LO6-2, LO6-3] Walsh Company
manufactures and sells one product. The following information
pertains to each of the company’s first two years of
operations:
Variable costs per unit: Manufacturing: Direct materials $ 27
Direct labor $ 12 Variable manufacturing overhead $ 4 Variable
selling and administrative $ 3 Fixed costs per year:
Fixed manufacturing overhead $ 240,000 Fixed selling and
administrative expenses $ 90,000 During its first year...
Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3]...
Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product
Costs and Income Statements [LO6-1, LO6-2, LO6-3]
Walsh Company manufactures and sells one product. The following
information pertains to each of the company’s first two years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
25
Direct labor
$
17
Variable manufacturing overhead
$
2
Variable selling and administrative
$
1
Fixed costs per year:
Fixed manufacturing overhead
$
400,000
Fixed selling and administrative expenses
$
80,000
During its first...
Exercise 6-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3] Walsh...
Exercise 6-9 Variable and Absorption Costing Unit Product Costs
and Income Statements [LO6-1, LO6-2, LO6-3]
Walsh Company manufactures and sells one product. The following
information pertains to each of the company’s first two years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
30
Direct labor
$
14
Variable manufacturing overhead
$
6
Variable selling and administrative
$
5
Fixed costs per year:
Fixed manufacturing overhead
$
240,000
Fixed selling and administrative expenses
$
90,000
During its first year...
Problem 6-18 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2] Haas Company...
Problem 6-18 Variable and Absorption Costing Unit Product Costs
and Income Statements [LO6-1, LO6-2]
Haas Company manufactures and sells one product. The following
information pertains to each of the company’s first three years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
28
Direct labor
$
20
Variable manufacturing overhead
$
4
Variable selling and administrative
$
3
Fixed costs per year:
Fixed manufacturing overhead
$
210,000
Fixed selling and administrative expenses
$
150,000
During its first year of...
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