Drucker Corporation Manufactures and Sells One Product

question 255

Essay

Drucker Corporation manufactures and sells one product. In the company's first year of operations, the variable cost consisted solely of direct materials of $84 per unit. The annual fixed costs were $288,000 of direct labor cost, $1,728,000 of fixed manufacturing overhead expense, and $782,000 of fixed selling and administrative expense. The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 24,000 units and sold 17,000 units. The company's only product is sold for $249 per unit.
Required:a. Assume the company uses super-variable costing. Compute the unit product cost for the year.
b. Assume the company uses super-variable costing. Prepare an income statement for the year.

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Definitions:

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