Question

Refer to the data in Exercise 6–9 for CompuDesk. Assume in this exercise that the company uses absorption costing.
In Exercise 6–9, CompuDesk, Inc., makes an oak desk specially designed for personal computers. The desk sells for $200. Data for last year’s operations follow:
Units in beginning inventory . . . . . . . . . . . . . . . 0
Units produced . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Units sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000
Units in ending inventory . . . . . . . . . . . . . . . . . 1,000
Variable costs per unit:
Direct materials . . . . . . . . . . . . . . . . . . . . . . . $ 60
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Variable manufacturing overhead . . . . . . . . . 10
Variable selling and administrative . . . . . . . . 20
Total variable cost per unit . . . . . . . . . . . . . . . $120
Fixed costs:
Fixed manufacturing overhead . . . . . . . . . . . $300,000
Fixed selling and administrative . . . . . . . . . . 450,000
Total fixed costs . . . . . . . . . . . . . . . . . . . . . . . $750,000

Required:
1. Compute the unit product cost for one computer desk.
2. Prepare an income statement.



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  • CreatedSeptember 27, 2013
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