Louie's Music produces harmonicas that it sells for $12 each.The company computes a new monthly fixed manufacturing overhead allocation rate based on the planned number of harmonicas to be produced that month.Assume all costs and production levels are exactly as planned.The following data are from Louie's Music's first month in business:

Requirements
1.Compute the product cost per harmonica produced under variable costing.
2.Prepare an income statement for January,2019

Question

Louie's Music produces harmonicas that it sells for $12 each.The company computes a new monthly fixed manufacturing overhead allocation rate based on the planned number of harmonicas to be produced that month.Assume all costs and production levels are exactly as planned.The following data are from Louie's Music's first month in business:
  
Requirements
1.Compute the product cost per harmonica produced under variable costing.
2.Prepare an income statement for January,2019

Quizplus · Accepted Answer

The Answer of Louie's Music produces harmonicas that it sells for $12 each.The company computes a new monthly fixed manufacturing overhead allocation rate based on the planned number of harmonicas to be produced that month.Assume all costs and production levels are exactly as planned.The following data are from Louie's Music's first month in business:
  
Requirements
1.Compute the product cost per harmonica produced under variable costing.
2.Prepare an income statement for January,2019

Louie's Music Produces Harmonicas That It Sells for $12 Each