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  3. mcneil corporation has provided the following data

McNeil Corporation has provided the following data for its two most recent years of operation:Selling...

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Accounting

McNeil Corporation has provided the following data for its two most recent years of operation:

Selling price per unit

$ 70

Manufacturing costs:

Variable manufacturing cost per unit produced:

Direct materials

$ 12

Direct labor

$ 6

Variable manufacturing overhead

$ 3

Fixed manufacturing overhead per year

$ 200,000

Selling and administrative expenses:

Variable selling and administrative expense per unit sold

$ 4

Fixed selling and administrative expense per year

$ 65,000

Year 1

Year 2

Units in beginning inventory

0

1,000

Units produced during the year

7,000

8,000

Units sold during the year

6,000

5,000

Units in ending inventory

1,000

4,000


  1. Required:
    a. Assume the company uses absorption costing. Compute the unit product cost in each year.
    b. Assume the company uses absorption costing. Prepare an income statement for each year.
    c. Assume the company uses variable costing. Compute the unit product cost in each year.
    d. Assume the company uses variable costing. Prepare an income statement for each year.
  2. e. Which method is a better way to analyze results? Justify your reasoning.

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