Fantastic29 Company manufactures and sells a single product. The following costs were incurred during the company's first year ofoperations:Direct materials: $12 per unit- Direct labor: $ 4 per unit- Manufacturing overhead costs:Variable: $2 per unit•Fixed: $370,000- Selling and administrative costs:Variable: $2 per unitFixed: $ 200,000During the year, the company produced 37,000 units and sold 18,000 units. The selling price of the company's product is $55 per unit.Required:1. Assume that the company uses absorption costing:a. Compute the unit product cost.b. Prepare an income statement for the year.2. Assume that the company uses variable costing:a. Compute the unit product cost.b. Prepare an income statement for the year.Complete this question by entering your answers in the tabs below.Req 1AReq 1BReq 2AReq 2BPrepare an income statement for the year. Assume that the company uses absorption costing.

Income Statement-Companies follow marginal and absorption costing methods in the internal reporting…

1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: à. Compute the unit product cost. . Prepare an income statement for the year.

1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: à. Compute the unit product cost. . Prepare an income statement for the year.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PA: The following product Costs are available for Haworth Company on the production of chairs: direct...

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Question

Fantastic29 Company manufactures and sells a single product. The following costs were incurred during the company's first year of
operations:
Direct materials: $12 per unit
- Direct labor: $ 4 per unit
- Manufacturing overhead costs:
Variable: $2 per unit
•
Fixed: $370,000
- Selling and administrative costs:
Variable: $2 per unit
Fixed: $ 200,000
During the year, the company produced 37,000 units and sold 18,000 units. The selling price of the company's product is $55 per unit.
Required:
1. Assume that the company uses absorption costing:
a. Compute the unit product cost.
b. Prepare an income statement for the year.
2. Assume that the company uses variable costing:
a. Compute the unit product cost.
b. Prepare an income statement for the year.
Complete this question by entering your answers in the tabs below.
Req 1A
Req 1B
Req 2A
Req 2B
Prepare an income statement for the year. Assume that the company uses absorption costing.

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Step 3: Calculation of Income statement as per absorption costing for the year

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Step 4: Calculation of Unit Product Cost

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Step 5: Calculation of Income statement as per absorption costing for the year

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