Home / Questions / Variable and Absorption Costing Unit Product Costs and Income Statements O’Donnell Company...
Variable and Absorption Costing Unit Product Costs and Income Statements O’Donnell 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, O’Donnell produced 100,000 units and sold 80,000 units. During its second year of operations, it produced 75,000 units and sold 90,000 units. In its third year, O’Donnell produced 80,000 units and sold 75,000 units. The selling price of the company’s product is $70 per unit.
Required:
1. Assume the company uses variable costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In other words, it assumes that the oldest units in inventory are sold first):
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.
2. Assume the company uses variable costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it assumes that the newest units in inventory are sold first):
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.
3. Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In other words, it assumes that the oldest units in inventory are sold first):
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.
4. Assume the company uses absorption costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it assumes that the newest units in inventory are sold first):
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.
Jun 28 2020 View more View Less
International Trade (20 points)Refer to the table below. It shows the number of hours it requires for Mexico and Venezuela to produce 1 bicycle and 1 bushel of bananas.Bi...
May 26 2020Calmodulin activates protein kinases in response to a transient increase in: (select one answer)cAMPCa2+DAGIP3PKC
Apr 17 2020You found your dream house. It will cost you $300000 and you will put down $60000 as a down payment. For the rest you get a 30-year 5.0% mortgage. What will be your month...
Apr 06 2021Who should be involved in orientation of new employees? Why would it not be appropriate to provide employee orientation purely online? >
May 13 2020A global car manufacturer wants to start production in China. While catering to local responsiveness, what can the firm do to get scale economies? A. Increase costs whene...
Jan 11 2020Choosing an appropriate value of the smoothing constant α is a key decision when applying the exponential smoothing method. When relevant historical data exist, one appro...
Aug 06 2020What are the tangible and intangible benefits that Walgreens receives by being a leader in hiring employees with disabilities?
May 20 2020In the analysis of a Joule-Thomson experiment we may be given the initial and final molar volumes of the gas, rather than the initial and final pressures. Express the der...
Jun 09 2020A mass of 85 kg is supported on springs which deflect 18 mm under the weight of the mass. The vibrations of the mass are constrained to be linear and vertical and are da...
Jun 21 2020GSCM 460 THE PEACH COMPUTER COMPANYTHE PEACH COMPUTER COMPANY Donald Bright, supply manager at the Peach Computer Company, was preparing his notes for a meeting to be h...
Jul 21 2020