During Heaton Company's first two years of operations, it reported absorption costing net operating income as...
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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $61 per unit) Cost of goods sold (@ $29 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $254,000 fixed each year. Year 1 Year 2 $ 1,037,000 $ 1,647,000 493,000 544,000 305,000 783,000 864,000 335,000 $ 239,000 $ 529,000 The company's $29 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($242,000 22,000 units) Absorption costing unit product cost $ 7 9 2 11 $ 29 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 22,000 22,000 Units sold 17,000 27,000 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year. During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $61 per unit) Cost of goods sold (@ $29 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $254,000 fixed each year. Year 1 Year 2 $ 1,037,000 $ 1,647,000 493,000 544,000 305,000 783,000 864,000 335,000 $ 239,000 $ 529,000 The company's $29 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($242,000 22,000 units) Absorption costing unit product cost $ 7 9 2 11 $ 29 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 22,000 22,000 Units sold 17,000 27,000 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year.
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1 Using variable costing the unit product cost for both years can be calculated by summing up the di... View the full answer
Related Book For
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
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