Haas Company manufactures and sells one product. The following information perta
ID: 2468645 • Letter: H
Question
Haas 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 $20
Direct labor $12
Variable manufacturing overhead $3
Variable selling and administrative $1
Fixed costs per year:
Fixed manufacturing overhead $390,000
Fixed selling and administrative expenses $210,000
During its first year of operations, Haas produced 50,000 units and sold 50,000 units. During its second year of operations, it produced 65,000 units and sold 40,000 units. In its third year, Haas produced 30,000 units and sold 55,000 units. The selling price of the company’s product is $48 per unit.
Required:
Compute the company’s break-even point in units sold.
Compute the unit product cost for year 1, year 2, and year 3.
Prepare an income statement for year 1, year 2, and year 3.
Compute the unit product cost for year 1, year 2, and year 3. (Round your intermediate and final answers to 2 decimal places.)
Prepare an income statement for year 1, year 2, and year 3. (Round your intermediate calculations to 2 decimal places.)
During its first year of operations, Haas produced 50,000 units and sold 50,000 units. During its second year of operations, it produced 65,000 units and sold 40,000 units. In its third year, Haas produced 30,000 units and sold 55,000 units. The selling price of the company’s product is $48 per unit.
Explanation / Answer
1.
Company's break-even point in unit sold is 50,000 units calculated as under:
2.
Unit product cost and Net loss/profit basis variable costing is calculated as under:
3.
Absorption Costing
Haas Company Contribution Margin Income Statement For the Year Ended XXXX Per unit Sales 48 Variable Costs 36.0 Contribution Margin per unit 12.0 Fixed Costs 6,00,000 Break even unit sales= Fixed expenses/Contribution Margin per unit 50,000Related Questions
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