Haas Company manufactures and sells one product. The following information pertains to each of the company's...
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Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable cost per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 30 18 6 3 $960,000 $240,000 During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company'Slows product is $87 per unit. Go to Settings to activate Wir Required: 1. Compute the company's break-even point in units sold. 2. Assume the company uses variable costing: a. Compute unit product costs for Year 1. Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. 3. Assume the company uses absorption costing: a. Compute unit product costs for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. 4. Compare net income operating income figures that you computed in requirements 2 and 3 to the break-even point calculated inte W requirement 1. Which net operating income figures seem counterintuitive? Why? Go to Settings Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable cost per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 30 18 6 3 $960,000 $240,000 During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company'Slows product is $87 per unit. Go to Settings to activate Wir Required: 1. Compute the company's break-even point in units sold. 2. Assume the company uses variable costing: a. Compute unit product costs for Year 1. Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. 3. Assume the company uses absorption costing: a. Compute unit product costs for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. 4. Compare net income operating income figures that you computed in requirements 2 and 3 to the break-even point calculated inte W requirement 1. Which net operating income figures seem counterintuitive? Why? Go to Settings
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1 Compute the companys breakeven point in units sold First calculate the contribution margin per unit Contribution Margin per Unit Selling Price per Unit Variable Cost per Unit 87 30 18 6 3 30 Next ca... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0077522940
15th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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