5.00 points High Country, Inc. produces and sells many recreational products. pl

Question

5.00 points High Country, Inc. produces and sells many recreational products. plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation The company has just opened a new Beginning inventory Units produced Units sold 49,000 44,000 $79 Selling price per unit Selling and administrative expenses Variable per unit Fixed per month Manufacfuring costs Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost per month 833,000 $ 567,000 S17 Management is anxious to see how profitable the new camp cot will be and has asked that an income statement be prepared for May Required: 1. Assume that the company uses absorption costing a. Determine the unit product cost nit product cost b. Prepare an income statement for May High Country, Inc. Absorption Costing Income Statement

Explanation / Answer

1 A Direct Material 17.00 Direct Labor 8.00 Fixed MOH Cost 833000 Variable MOH Cost 4.00 Units Produced 49000 Fixed MOH Cost 17.00 Fixed MOH Cost PU 17.00 Total Unit Cost 46.00 Note: Variable & Fixed S&A Expense are not part of Product Costs B High Country Inc. Absorption Costing Income Statement Sales 3476000 (44000*79) Less: COGS 2024000 COGS: Gross Profit 1452000 Total Unit Cost 46 Less: Marketing & Admin Exp: Unit Sold 44000 Variable Cost 176000 (44000*4) COGS: 2024000 Fixed Cost 567000 Net Operating Income 709000 2 A Direct Material 17.00 Direct Labor 8.00 Variable MOH Cost 4.00 Fixed MOH Cost 0.00 (Not Part of Cost under Variable Costing) Total Unit Cost 29.00 Note: Variable & Fixed S&A Expense are not part of Product Costs B High Country Inc. Absorption Costing Income Statement Sales 3476000 Units Produced 49,000 Variable Expense: Unit Sold 44000 Opening Inventory 0 Closing Units 5,000 Add: Cost of Goods Manufactured 1421000 (49000*29) Cost of Goods Available for Sales 1421000 Less: Closing Inventory 145000 1276000 (5000*29) Variable Marketing & Admin Ex 176000 Fixed Expenses: Fixed Manufacturing OH 833000 Fixed Marketing & Admin Exp 567000 1400000 Net Operating Income 624000

Related Questions

Navigate

• Browse (All)
• Browse 5
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.