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Chapter 5-3 Haas Company manufactures and sells

Question : Chapter 5-3 Haas Company manufactures and sells : 3172

Chapter 5-3

Haas Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations:

During its first year of operations, Haas produced 100,000 units and sold 100,000 units. During its second year of operations, it produced 115,000 units and sold 90,000 units. In its third year, Haas produced 80,000 units and sold 105,000 units. The selling price of the company’s product is $58 per unit.

 

Required:

1. Compute the company’s break-even point in units sold.

2. Assume the company uses variable costing:

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.

Haas CompanyVariable Costing Income StatementYear 1Year 2Year 3Variable expenses:Total variable expensesFixed expenses:Total fixed expenses:Net operating income (loss)

3. Assume the company uses absorption costing:

a. Compute the unit product cost for year 1, year 2, and year 3. (Round your intermediate and final answers to 2 decimal places.)

b. Prepare an income statement for year 1, year 2, and year 3. (Round your intermediate calculations to 2 decimal places.)

Haas CompanyAbsorption Costing Income StatementYear 1Year 2Year 3Net operating income (loss)

 

Variable costs per unit:

 

 

 

Manufacturing:

 

 

 

Direct materials

$

27

 

Direct labor

$

19

 

Variable manufacturing overhead

$

3

 

Variable selling and administrative

$

2

 

Fixed costs per year:

 

 

 

Fixed manufacturing overhead

$

460,000

 

Fixed selling and administrative expenses

$

240,000

 

 

       

 

Solution
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