Question

ch 6 exer 4 Lynch Company manufactures and sells a single product. The following costs were...

ch 6 exer 4

Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations:

      

  Variable costs per unit:
    Manufacturing:
        Direct materials $ 13
        Direct labor $ 10
        Variable manufacturing overhead $ 3
        Variable selling and administrative $ 3
  Fixed costs per year:
    Fixed manufacturing overhead $ 352,000
    Fixed selling and administrative $ 262,000

    

During the year, the company produced 32,000 units and sold 27,000 units. The selling price of the company’s product is $56 per unit.

    

Required:
Assume that the company uses absorption costing:

    

a. Compute the unit product cost.

          

Unit product cost

        

b.

Prepare an income statement for the year.

Lynch Company
Absorption Costing Income Statement
0
$0

               

Assume that the company uses variable costing:

   

c Compute the unit product cost.
Unit product cost

               

d.

Prepare an income statement for the year.

Lynch Company
Variable Costing Income Statement
Variable expenses:
0
0
Fixed expenses:
0
$0

            

Homework Answers

Answer #1
1a
Direct materials 13
Direct labor 10
Variable manufacturing overhead 3
Fixed manufacturing overhead 11 =352000/32000
Unit product cost 37
b
Absorption Costing Income Statement
Sales 1512000 =27000*56
Cost of goods sold 999000 =27000*37
Gross margin 513000
Selling and administrative expenses 343000 =262000+(27000*3)
Net operating income (loss) 170000
2a
Direct materials 13
Direct labor 10
Variable manufacturing overhead 3
Unit product cost 26
b
Variable Costing Income Statement
Sales 1512000
Less:
Variable cost of goods sold 702000
Variable selling expense 81000 783000
Contribution margin 729000
Less: Fixed expenses
Fixed selling and administrative expenses . 262000
Fixed manufacturing overhead 352000 614000
Net operating income (loss) 115000
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s...
Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations:          Variable costs per unit:     Manufacturing:         Direct materials $ 11         Direct labor $ 3         Variable manufacturing overhead $ 1         Variable selling and administrative $ 1   Fixed costs per year:     Fixed manufacturing overhead $ 330,000     Fixed selling and administrative $ 240,000      During the year, the company produced 30,000 units and sold 23,000 units. The selling price of the company’s product...
Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s...
Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations: Variable costs per unit: Manufacturing: Direct materials $ 14 Direct labor $ 3 Variable manufacturing overhead $ 1 Variable selling and administrative $ 1 Fixed costs per year: Fixed manufacturing overhead $ 290,000 Fixed selling and administrative $ 200,000 During the year, the company produced 29,000 units and sold 22,000 units. The selling price of the company’s product is $42...
Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s...
Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations: Variable costs per unit: Manufacturing: Direct materials $ 15 Direct labor $ 5 Variable manufacturing overhead $ 1 Variable selling and administrative $ 1 Fixed costs per year: Fixed manufacturing overhead $ 286,000 Fixed selling and administrative $ 196,000 During the year, the company produced 26,000 units and sold 22,000 units. The selling price of the company’s product is $46...
Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s...
Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations: Variable costs per unit: Manufacturing: Direct materials $ 10 Direct labor $ 7 Variable manufacturing overhead $ 3 Variable selling and administrative $ 3 Fixed costs per year: Fixed manufacturing overhead $ 380,000 Fixed selling and administrative expenses $ 290,000 During the year, the company produced 38,000 units and sold 18,000 units. The selling price of the company’s product is...
Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s...
Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations: Variable costs per unit:     Manufacturing:          Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6          Direct labor . . . . . . . . . . . . . . . . . . . ....
ch6 exer 3 Walsh Company manufactures and sells one product. The following information pertains to each...
ch6 exer 3 Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:      Variable costs per unit:     Manufacturing:         Direct materials $ 25         Direct labor $ 16         Variable manufacturing overhead $ 6     Variable selling and administrative $ 5   Fixed costs per year:     Fixed manufacturing overhead $ 320,000     Fixed selling and administrative expenses $ 60,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During...
Naomi company manufactures and sells one product. The following information pertains to each of the company’s...
Naomi company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations, using super-variable costing.       Variable cost per unit:    Direct materials $10 Fixed costs per year:    Direct labor $113,400 Fixed manufacturing overhead $94,500 Fixed selling and administrative expenses $262,000 The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. The selling price of the company’s product is $150 per unit. Year 1...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations: Variable costs per unit: Manufacturing: Direct materials $ 26 Direct labor $ 14 Variable manufacturing overhead $ 4 Variable selling and administrative $ 3 Fixed costs per year: Fixed manufacturing overhead $ 320,000 Fixed selling and administrative expenses $ 90,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations: Variable costs per unit: Manufacturing: Direct materials $ 27 Direct labor $ 17 Variable manufacturing overhead $ 4 Variable selling and administrative $ 3 Fixed costs per year: Fixed manufacturing overhead $ 400,000 Fixed selling and administrative expenses $ 70,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations: Variable costs per unit: Manufacturing: Direct materials $ 23 Direct labor $ 17 Variable manufacturing overhead $ 2 Variable selling and administrative $ 1 Fixed costs per year: Fixed manufacturing overhead $ 400,000 Fixed selling and administrative expenses $ 80,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT