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Required information [The following information applies to the questions displayed below.] O'Brien Company...

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Question

Accounting

Required information
[The following information applies to the questions displayed below.]
O'Brien 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'Brien produced 91,000 units and sold 70,000 units. During its second year of
operations, it produced 79,000 units and sold 95,000 units. In its third year, O'Brien produced 82,000 units and sold
77,000 units. The selling price of the company's product is $76 per unit.
Required:
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.
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