Question

CompuDesk, Inc., makes an oak desk specially design for personal computers. The desk sells for $200. Data for last year's operations follow:Units in beginning inventory --- 0Units produced ------------------- 10,000Units sold -------------------------- 9,000Units in ending inventory ------ 1,000Variable costs per unit: Direct materials -------------------------- $ 60 Direct labor ----------------------------------- 30 Variable manufacturing overhead ----- 10 Variable selling and administrative --- 20 Total variable cost per unit --------- $ 120Fixed costs: Fixed manufacturing overhead ------ $ 300,000 Fixed selling and administrative ------ 450,000 Total fixed costs ---------------------- $ 750,0001) Assume that the company uses variable costing. Compute the unit product cost for a (1) computer desk.2) Assume that the company uses variable costing. Prepare an income statement for a year in good form using the contribution format.3) What is the company's break-even point in terms of units sold?4) Reconcile the differenceRefer to the data above for CompuDesk. Assume in this exercise that the company uses absorption costing.1) Compute the unit product cost for one computer desk.2) Prepare an income statement for the year in good form.