Reference no: EM132517632

Variable costs per unit: Manufacturing:

Direct materials $26

Direct labor $18

Variable manufacturing overhead $6

Variable selling and administrative $3

Fixed costs per year:

Fixed manufacturing overhead $390,000

Fixed selling and administrative expenses $150,000

• During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company's product is $62 per unit.

Question 1.Compute the company's break-even point in unit sales.

Question 2. Assume the company uses variable costing:

a. Compute the unit product cost for Year 1, Year 2, and Year 3.

b. a income statement for Year 1, Year 2, and Year 3.

Question 3. Assume the company uses absorption costing:

a. Compute the unit product cost for Year 1, Year 2, and Year 3.

b. a income statement for Year 1, Year 2, and Year 3.