Prepare income statement for year using absorption costing

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Reference no: EM131731532

Question - The Hampton Company produces and sells a single product. The following data refer to the year just completed.

Selling price

$450



Units in beginning inventory

0

Units produced

25,000

Units sold

22,000



Variable costs per unit:


Direct materials

$150

Direct labor

$75

Variable manufacturing overhead

$25

Variable selling and admin

$15



Fixed costs:


Fixed manufacturing overhead

$275,000

Fixed selling and admin

$200,000

Required:

Compute the cost of a single unit of product under both the absorption costing and variable costing approaches. 

Prepare an income statement for the year using absorption costing.

Reference no: EM131731532

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