Chapter 7: Homework Check my w 1 Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: 5 Variable costs per unit Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year Find manufacturing overhead Fixed selling and administrative expenses $ $ $ 16 $320,000 $70,000 During its first year of operations, Wesh produced 50,000 units and sold 40,000 units. During its second year of operations. It produced 40,000 units and sold 50.000 units. The selling price of the company's product is $89 per unit Required: 1. Assume the company uses variable costing: a. Compute the unit product cost for Year 1 and Year 2. b. Prepare an income statement for Year 1 and Year 2 2. Assume the company uses absorption costing: a. Compute the unit product cost for Year 1 and Year 2. b. Prepare an income statement for Year 1 and Year 2 3. Reconcile the difference between variable costing and absorption costing net operating income in Year 1. Answer is not complete. Complete this question by entering your answers in the tabs below. RIA Reg 10 Reg 2 Reg 25 Req3 Assume the company uses variable costing. Prepare an income statement for Year 1 and Year 2 Walsh Company Income Statement Year 1 Year 2 $ 4.450,000 3.560.000 We expenses Variable cost of goods sold 1 120 000 1,400,000 540,000 3 800,000 200.000 250 000 100 000 200,000 2 120 000 2,650,000 Contribution margin 1.440.000 1.800.000 Fred expenses Food manufacturing overhead 320,000 320.000 Foed selling and administrative expense 70,000 70.000 OOOO 300.000 390,000 $ 1.410,000 Net operating income oss) 1 050 000 Req1A Req2A > Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two yea operations Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ $ $ $ 28 16 5 $320,000 $ 70,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations. It produced 40,000 units and sold 50,000 units. The selling price of the company's product is $89 per unit. Required: 1. Assume the company uses variable costing: a. Compute the unit product cost for Year 1 and Year 2. b. Prepare an income statement for Year 1 and Year 2. 2. Assume the company uses absorption costing: a. Compute the unit product cost for Year 1 and Year 2 b. Prepare an income statement for Year 1 and Year 2. 3. Reconcile the difference between variable costing and absorption costing net operating income in Year 1. Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1A Reg 16 Reg 2A Reg 2B Reg 3 Assume the company uses absorption costing. Prepare an income statement for Year 1 and Year 2. (Round your intermediate calculations to 2 decimal places.) Year 2 $ 4 450 000 Walsh Company Income Statement Year 1 Sales $ 3,560,000 Cost of goods sold 2.216,000 Gross margin 1,344,000 Seling and administrative 230,000 expenses Net operating income (loss) $ 1.114,000 270,000 $ (270,000) --- Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations $ Variable costs per unit: Manufacturing Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per years Fixed manufacturing overhead Fixed selling and administrative expenses $ 16 5 4 $320,000 $ 70,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company's product is $89 per unit. Required: 1. Assume the company uses variable costing: a Compute the unit product cost for Year 1 and Year 2 b. Prepare an income statement for Year 1 and Year 2 2. Assume the company uses absorption costing: a Compute the unit product cost for Year 1 and Year 2. b. Prepare an income statement for Year 1 and Year 2 3. Reconcile the difference between variable costing and absorption costing net operating income in Year 1 Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1A Reg 10 Reg 2A Reg 20 Reg 3 Reconcile the difference between variable costing and absorption costing net operating income in Year 1. (Enter any losses or deductions as a negative value. Round your intermediate calculations to 2 decimal places.) Variable costing net operating income foss) Add Fixed manufacturing overhead cost deferred in inventory under absorption costing Deduct Fed manufacturing overhead cost released from inventory under absorption costing Absorption costing net operating income loss) Year 1 Year 2 $ 1,050,000 $ 1.410,000 64,000 (80.000) $ 1,140,000 3 $ 1,330,000
