Dexter Corporation produces and sells a single product, a wooden hand loom for weaving small items such
Question:
Dexter Corporation produces and sells a single product, a wooden hand loom for weaving small items such
as scarves. Selected cost and operating data relating to the product for two years are given below:
Selling price per unit ...................................... $50
Manufacturing costs:
Variable per unit produced:
Direct materials ...................................... $11
Direct labor ............................................. $6
Variable overhead ................................... $3
Fixed per year ............................................ $120,000
Selling and administrative costs:
Variable per unit sold .................................. $4
Fixed per year ............................................ $70,000
Year 1 | Year 2 | |
Units in beginning inventory | 0 | 2,000 |
Units produced during the year | 10,000 | 6,000 |
Units sold during the year | 8,000 | 8,000 |
Units in ending inventory | 2,000 | 0 |
1. Assume the company uses absorption costing, compute the unit product cost in year 1
2. Assume the company uses absorption costing, and computes the unit product cost in year 2
3. Assume the company uses absorption costing, and compute the net operating income for year 1.
4. Assume the company uses variable costing, and compute the unit product cost in year 1.
5. Assume the company uses variable costing, and compute the net operating income for year 2.
Expert Answer:
Answer 1 Unit product cost in year 1 under absortion costing particulars per unit cost Direct materi... View the full answer
