Question - The Hampton Company produces and sells a single product. The following data refer to the year just completed.
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Selling price
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$450
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Units in beginning inventory
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0
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Units produced
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25,000
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Units sold
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22,000
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Variable costs per unit:
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Direct materials
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$150
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Direct labor
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$75
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Variable manufacturing overhead
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$25
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Variable selling and admin
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$15
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Fixed costs:
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Fixed manufacturing overhead
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$275,000
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Fixed selling and admin
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$200,000
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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.