$.$ Assignments: ACCT$-2210-$D

Question $4-$ Chapter $5$ Home

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Chapter $5$ Homework

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$4$

Northwood Company manufactures a basketball selling for $$25$ per unit in a small plant heavily relying on direct labor workers. Thus, variable expenses are high, totaling $$15\mathrm{.}00$ per ball, of which $60\%$ is direct labor cost.

$6\mathrm{.}25$

Last year, the company sold $31,750$ balls, with the following results:

Book

Sales $(31,750$ balls$)$

Hint

Variable expenses

Fixed expenses

Net operating income

$\backslash$table$[[$$$793,750$

Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations:During the year, the company produced $36,000$ units and sold $18,000$ units. The selling price of the company's product is $$55$ per unit.Required:

Assume the company uses absorption costing:

a$.$ Compute the unit product cost.

b$.$ Prepare an income statement for the year.

Assume the company uses variable costing:

a$.$ Compute the unit product cost.

b$.$ Prepare an income statement for the year.