ALL COMPONENTS / QUESTIONS MUST BE FULLY ANSWERED -- DO NOTUSE THE SIMILAR TEXTBOOK...

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Accounting

ALL COMPONENTS / QUESTIONS MUST BE FULLY ANSWERED -- DO NOTUSE THE SIMILAR TEXTBOOK SOLUTIONS ALREADY IN PLACE
IF YOU ARE UNABLE TO ANSWER ALL COMPONENTS, PLEASE DO NOTANSWER. INCOME STATEMENTS SHOULD BE IN THE MOST BASIC FORM. OPENINGAND CLOSING INVENTORY, ETC., ARE NOT TO BEINCLUDED.
Ciroc Company manufactures and sells one specific product. Thefollowing information pertains to each of Ciroc's first three yearsof operations:
Variable costs per unit:
Manufacturing:
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . $32
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 20
Variable manufacturing overhead . . . . . . . . . . $ 4
Variable selling and administrative . . . . . . . . . $ 3
Fixed costs per year:
Fixed manufacturing overhead . . . . . . . . . . . . $660,000
Fixed selling and administrative expenses . . . $ 120,000
During its first year of operations, Ciroc produced 100,000 unitsand sold 80,000 units. During its second year of operations, itproduced 75,000 units and sold 90,000 units. In its third year,Ciroc produced 80,000 units and sold 75,000 units. The sellingprice of the company’s product is $ 75 per unit.

Required: (ALL COMPONENTS OF ALL 4 QUESTIONS MUST BEANSWERED -- DO NOT USE THE TEXTBOOK SOLUTIONS ALREADY FOUND IN THISBOOK)

1. Assume the company uses variable costing and a FIFOinventory flow assumption (FIFO means first-infirst-out. In other words, it assumes that theoldest units in inventory are sold first):
a. Compute the unit product cost for Year 1, Year 2, and Year3.
b. Prepare an income statement for Year 1, Year 2, and Year 3 -- Donot include OPENING and CLOSING inventory.

2. Assume the company uses variable costing and a LIFOinventory flow assumption (LIFO meanslast-infirst-out. In other words, it assumes that the newest units ininventory are sold first):
a. Compute the unit product cost for Year 1, Year 2, and Year3.
b. Prepare an income statement for Year 1, Year 2, and Year 3 -- Donot include OPENING and CLOSING inventory.

3. Assume the company uses absorption costing and a FIFOinventory flow assumption (FIFO meansfirst-infirst-out. In other words, it assumes that theoldest units in inventory are sold first):
a. Compute the unit product cost for Year 1, Year 2, andYear 3.
b. Prepare an income statement for Year 1, Year 2, andYear 3 -- Do not include OPENING and CLOSINGinventory.

4. Assume the company uses absorption costing and a LIFOinventory flow assumption (LIFO means last-infirst-out. In other words, it assumes that the newest units ininventory are sold first):
a. Compute the unit product cost for Year 1, Year 2, and Year3.
b. Prepare an income statement for Year 1, Year 2, and Year 3 -- Donot include OPENING and CLOSING inventory.

Answer & Explanation Solved by verified expert

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Solution 1a Computation of Unit Product Cost Variable Costing Particulars Year 1 Year 2 Year 3 Unit Product Cost Direct material 3200 3200 3200 Direct Labor 2000 2000 2000 Variable manufacturing overhead 400 400 400 Unit product cost Variable costing 5600 5600 5600 Solution 1b Variable costing contribution format income statement FIFO Inventory Flow Assumption Ciroc Company Particulars Per Unit Year 1 Year 2 Year 3 Unit Sold 80000 Unit Sold 90000 Unit Sold 75000 Sales 7500 600000000 675000000 562500000 Variable Cost Variable manufacturing cost 5600 448000000 504000000 420000000 Variable Selling and Administrative Expenses 300 24000000 27000000 22500000 Contribution 1600 128000000 144000000 120000000 Fixed Manufacturing Overhead 66000000 66000000 66000000 Fixed Selling Administrative Expenses 12000000 12000000 12000000 See Answer

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In: AccountingALL COMPONENTS / QUESTIONS MUST BE FULLY ANSWERED -- DO NOTUSE THE SIMILAR TEXTBOOK SOLUTIONS...ALL COMPONENTS / QUESTIONS MUST BE FULLY ANSWERED -- DO NOTUSE THE SIMILAR TEXTBOOK SOLUTIONS ALREADY IN PLACEIF YOU ARE UNABLE TO ANSWER ALL COMPONENTS, PLEASE DO NOTANSWER. INCOME STATEMENTS SHOULD BE IN THE MOST BASIC FORM. OPENINGAND CLOSING INVENTORY, ETC., ARE NOT TO BEINCLUDED. Ciroc Company manufactures and sells one specific product. Thefollowing information pertains to each of Ciroc's first three yearsof operations:Variable costs per unit:Manufacturing:Direct materials . . . . . . . . . . . . . . . . . . . . . . . . $32Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 20Variable manufacturing overhead . . . . . . . . . . $ 4Variable selling and administrative . . . . . . . . . $ 3Fixed costs per year:Fixed manufacturing overhead . . . . . . . . . . . . $660,000Fixed selling and administrative expenses . . . $ 120,000During its first year of operations, Ciroc produced 100,000 unitsand sold 80,000 units. During its second year of operations, itproduced 75,000 units and sold 90,000 units. In its third year,Ciroc produced 80,000 units and sold 75,000 units. The sellingprice of the company’s product is $ 75 per unit.Required: (ALL COMPONENTS OF ALL 4 QUESTIONS MUST BEANSWERED -- DO NOT USE THE TEXTBOOK SOLUTIONS ALREADY FOUND IN THISBOOK)1. Assume the company uses variable costing and a FIFOinventory flow assumption (FIFO means first-infirst-out. In other words, it assumes that theoldest units in inventory are sold first):a. Compute the unit product cost for Year 1, Year 2, and Year3.b. Prepare an income statement for Year 1, Year 2, and Year 3 -- Donot include OPENING and CLOSING inventory.2. Assume the company uses variable costing and a LIFOinventory flow assumption (LIFO meanslast-infirst-out. In other words, it assumes that the newest units ininventory are sold first):a. Compute the unit product cost for Year 1, Year 2, and Year3.b. Prepare an income statement for Year 1, Year 2, and Year 3 -- Donot include OPENING and CLOSING inventory.3. Assume the company uses absorption costing and a FIFOinventory flow assumption (FIFO meansfirst-infirst-out. In other words, it assumes that theoldest units in inventory are sold first):a. Compute the unit product cost for Year 1, Year 2, andYear 3.b. Prepare an income statement for Year 1, Year 2, andYear 3 -- Do not include OPENING and CLOSINGinventory.4. Assume the company uses absorption costing and a LIFOinventory flow assumption (LIFO means last-infirst-out. In other words, it assumes that the newest units ininventory are sold first):a. Compute the unit product cost for Year 1, Year 2, and Year3.b. Prepare an income statement for Year 1, Year 2, and Year 3 -- Donot include OPENING and CLOSING inventory.