ACC 349 Week 4 Team Assignment Problems Ch. 7


P7-1A Blue Mountain Products manufactures and sells a variety of camping products.  Recently the company opened a new plant to manufacture a light-weight, self-standing tent. Cost and sales data for the first month of operations are shown below.


Manufacturing costs:

Fixed overhead                       $200,000

Variable overhead                   $4 per tent

Direct labor                             $16 per tent

Direct materials                       $40 per tent

Beginning inventory                           0 tents

Tents produced                                   10,000

Tents sold                                            9,000

Selling and administrative costs:

Fixed                                       $400,000

Variable                                   $6 per tent sold          


The tent sells for $150. Management is interested in the opening month’s results and has asked for an income statement.

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