question archive AB Company produces and sells a single product, a wooden hand loom for weaving small items such as scarves
AB Company produces and sells a single product, a wooden hand loom for weaving small items such as scarves
Subject:BusinessPrice: Bought3
AB Company produces and sells a single product, a wooden hand loom for weaving small items such as scarves. Selected cost and operating data relating to the product for two years are given below: (10) Selling price per unit Tk. 75 Manufacturing costs: Variable per unit produced: Direct materials Tk. 12 Direct labor Tk. 5 Variable manufacturing overhead. Tk. 7 Fixed manufacturing overhead per year ...... Tk. 150,000 Selling and administrative expenses: Variable per unit sold .. Tk. 1 Fixed per year. Tk. 60,000 Year 1 Year 2 Units in beginning inventory 0 3000 Units produced during the year. 15,000 9000 Units sold during the year. 12,000 12,000 Required: 1. Assume the company uses absorption costing. a. Compute the unit product cost in each year. b. Prepare an income statement for each year. 2. Assume the company uses variable costing. a. Compute the unit product cost in each year. b. Prepare an income statement for each year. 3. Reconcile the variable costing and absorption costing net operating incomes.
