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The Hampton Company produces and sells a single product. The following data refer to the year just completed.
Selling price $450
Units in beginning inventory0
Units produced 25,000Units sold 22,000 Variable costs per unit:
Direct materials $150Direct labor $75Variable manufacturing overhead $25Variable selling and admin $15 Fixed costs:
Fixed manufacturing overhead $275,000Fixed selling and admin $200,000 Requirements: a. Compute the cost of a single unit of product under both the absorption costing and variable costing approaches. b. Prepare an income statement for the year using absorption costing. c. Prepare an income statement for the year using variable costing.
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