Question

High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a foldi
45,000 40,000 Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses Variab
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a foldi
45,000 40,000 79 Beginnine inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Va
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Answer #1

Answer 1-a.

Unit Product Cost = Direct Materials + Direct Labor + Variable Manufacturing Overhead + Fixed Manufacturing Overhead
Unit Product Cost = $17 + $10 + $2 + $810,000/45,000
Unit Product Cost = $47

Answer 1-b.

High Country, Inc. Absorption Costing Income Statement Sales $ Cost of Goods Sold $ Gross Profit $ Selling and Administrative

Sales = 40,000 * $79
Sales = $3,160,000

Cost of goods sold = 40,000 * $47
Cost of goods sold = $1,880,000

Selling and administrative expenses = 40,000 * $2 + $570,000
Selling and administrative expenses = $650,000

Answer 2-a.

Unit Product Cost = Direct Materials + Direct Labor + Variable Manufacturing Overhead
Unit Product Cost = $17 + $10 + $2
Unit Product Cost = $29

Answer 2-b.

$ 3,160,000 High Country, Inc. Variable Costing Income Statement Sales Variable Expenses: Variable Cost of Goods Sold $ 1,160

Sales = 40,000 * $79
Sales = $3,160,000

Variable cost of goods sold = 40,000 * $29
Variable cost of goods sold = $1,160,000

Variable selling and administrative expenses = 40,000 * $2
Variable selling and administrative expenses = $80,000

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