Required information [The following information applies to the questions displayed below.] O'Brien 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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ $ $ $ 25 15 6 2 $590,000 $150,000 During its first year of operations, O'Brien produced 92,000 units and sold 72,000 units. During its second year of operations, it produced 75,000 units and sold 90,000 units. In its third year, O'Brien produced 81,000 units and sold 76,000 units. The selling price of the company's product is $71 per unit. 3. Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In other words, it assumes that the oldest units in inventory are sold first): a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3.

Required information [The following information applies to the questions displayed below.] O'Brien 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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ $ $ $ 25 15 6 2 $590,000 $150,000 During its first year of operations, O'Brien produced 92,000 units and sold 72,000 units. During its second year of operations, it produced 75,000 units and sold 90,000 units. In its third year, O'Brien produced 81,000 units and sold 76,000 units. The selling price of the company's product is $71 per unit. 3. Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In other words, it assumes that the oldest units in inventory are sold first): a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4EB: Roper Furniture manufactures office furniture and tracks cost data across their process. The...

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SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
Roper Furniture manufactures office furniture and tracks cost data across their process. The following are some of the costs that they incur. Classify these costs as fixed or variable costs, and as product costs or period costs. Wood used to produce desks ($125,00 per desk) Production labor used to produce desks ($15 per hour) Production supervisor salary ($45,000 per year) Depreciation on factory equipment ($60,000 per year) Selling and administrative expenses ($45,000 per year) Rent on corporate office ($44,000 per year) Nails, glue, and other materials required to produce desks (varies per desk) Utilities expenses for production facility Sales staff commission (5% of gross sales)
Required information [The following information applies to the questions displayed below.] O'Brien 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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $27 $17 $5 $3 $500,000 $140,000 During its first year of operations, O'Brien produced 99,000 units and sold 79,000 units. During its second year of operations, it produced 80,000 units and sold 95,000 units. In its third year, O'Brien produced 90,000 units and sold 85,000 units. The selling price of the company's product is $77 per unit. 3. Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In other words, it assumes that the oldest units in inventory are sold first):…
! Required information [The following information applies to the questions displayed below.] O'Brien 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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ $ $ NE 25 5562 15 $590,000 $150,000 During its first year of operations, O'Brien produced 92,000 units and sold 72,000 units. During its second year of operations, it produced 75,000 units and sold 90,000 units. In its third year, O'Brien produced 81,000 units and sold 76,000 units. The selling price of the company's product is $71 per unit. Required: 1. Assume the company uses variable costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In other words, it assumes that the oldest units in inventory…
! Required information [The following information applies to the questions displayed below.] O'Brien 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: $ 30 Direct materials Direct labor $ 16 Variable manufacturing overhead $ Variable selling and administrative $ Fixed costs per year: Fixed manufacturing overhead $580,000 $120,000 Fixed selling and administrative expenses During its first year of operations, O'Brien produced 94,000 units and sold 78,000 units. During its second year of operations, it produced 84,000 units and sold 95,000 units. In its third year, O'Brien produced 85,000 units and sold 80,000 units. The selling price of the company's product is $71 per unit. Required: 1. Assume the company uses variable costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In other words, it assumes that the oldest units in inventory are…
! Required information [The following information applies to the questions displayed below.] O'Brien 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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 27 $ 14 $5 $3 $570,000 $ 180,000 During its first year of operations, O'Brien produced 98,000 units and sold 75,000 units. During its second year of operations, it produced 77,000 units and sold 95,000 units. In its third year, O'Brien produced 89,000 units and sold 84,000 units. The selling price of the company's product is $75 per unit. a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. Required: 1. Assume the company uses variable costing and a…
Required information [The following information applies to the questions displayed below.] O'Brien 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 Direct labor $ $ Variable manufacturing overhead Variable selling and administrative $ Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $560,000 $100,000 During its first year of operations, O'Brien produced 98,000 units and sold 75,000 units. During its second year of operations, it produced 80,000 units and sold 98,000 units. In its third year, O'Brien produced 90,000 units and sold 85,000 units. The selling price of the company's product is $74 per unit. 2. Assume the company uses variable costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it assumes that the newest units in inventory are sold first): a.…
! Required information [The following information applies to the questions displayed below.] O'Brien 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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 27 $ 14 $5 $ 3 $570,000 $ 180,000 During its first year of operations, O'Brien produced 98,000 units and sold 75,000 units. During its second year of operations, it produced 77,000 units and sold 95,000 units. In its third year, O'Brien produced 89,000 units and sold 84,000 units. The selling price of the company's product is $75 per unit. a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. 2. Assume the company uses variable costing and a LIFO…
Required information Skip to question [The following information applies to the questions displayed below.] O’Brien 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 $ 27 Direct labor $ 16 Variable manufacturing overhead $ 3 Variable selling and administrative $ 3 Fixed costs per year: Fixed manufacturing overhead $ 590,000 Fixed selling and administrative expenses $ 190,000 During its first year of operations, O’Brien produced 96,000 units and sold 73,000 units. During its second year of operations, it produced 84,000 units and sold 102,000 units. In its third year, O’Brien produced 80,000 units and sold 75,000 units. The selling price of the company’s product is $80 per unit. Required: 1. Assume the company uses variable costing and a FIFO inventory flow assumption (FIFO means…
Required information Skip to question [The following information applies to the questions displayed below.] O’Brien 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 $ 26 Direct labor $ 15 Variable manufacturing overhead $ 5 Variable selling and administrative $ 2 Fixed costs per year: Fixed manufacturing overhead $ 570,000 Fixed selling and administrative expenses $ 140,000 During its first year of operations, O’Brien produced 96,000 units and sold 77,000 units. During its second year of operations, it produced 85,000 units and sold 99,000 units. In its third year, O’Brien produced 87,000 units and sold 82,000 units. The selling price of the company’s product is $79 per unit. 3. Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In other words, it…
Required information Skip to question [The following information applies to the questions displayed below.] O’Brien 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 $ 27 Direct labor $ 16 Variable manufacturing overhead $ 3 Variable selling and administrative $ 3 Fixed costs per year: Fixed manufacturing overhead $ 590,000 Fixed selling and administrative expenses $ 190,000 During its first year of operations, O’Brien produced 96,000 units and sold 73,000 units. During its second year of operations, it produced 84,000 units and sold 102,000 units. In its third year, O’Brien produced 80,000 units and sold 75,000 units. The selling price of the company’s product is $80 per unit. 4. Assume the company uses absorption costing and a LIFO inventory flow assumption (LIFO means last-in…
! Required information [The following information applies to the questions displayed below.] O'Brien 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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses es es es es $ $ 25 HN 15 562 6 2 $590,000 $150,000 During its first year of operations, O'Brien produced 92,000 units and sold 72,000 units. During its second year of operations, it produced 75,000 units and sold 90,000 units. In its third year, O'Brien produced 81,000 units and sold 76,000 units. The selling price of the company's product is $71 per unit. 2. Assume the company uses variable costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it assumes that the newest units in…