nework Cool Sky reports the following costing data on its product for its first

Question

nework Cool Sky reports the following costing data on its product for its first year of operations During this first year, the company produced 46,000 units and sold 38,000 units at a price of $120 per unit. Manufacturing costs Direct matertals per unit Direct labor per unt Variable overhead per unit $ 48 $ 18 6 460,000 Fixed overhead for the year Vartable selling and administrative cost per Fixed selling and administrative cost per year $ Selling and administrative cost $10 unit b. Assume the company uses absorption costing. Prepare lts income statement for the year under absorption costing COOL SKY Absorption Costing Income Statement

Explanation / Answer

Solution:

Computation of Unit Product Cost - Absorption Costing Particulars Amount Unit Product Cost: Direct material $48.00 Direct Labor $18.00 Variable manufacturing overhead $6.00 Fixed manufacturing overhead
($460,000/46000) $10.00 Unit Product Cost $82.00

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