During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales ( $64 per unit) $ 1,152,000 $1,792,000 Cont of goods nold ($40 per unit) 220,000 1,120.000 Gross margin 432,000 672,000 Selling and administrative expenses 304,000 334,000 Net operating income $ 120,000 $ 338,000 $3 per unit variable: $250,000 fixed each year. The company's $40 unit product cost is computed as follows: Direct materials $9 Direct Labor 10 Variable manufacturing overbead 2 Fixed manufacturing overhead (5437,000 - 23.000 units) 19 Abeorption conting unit product cont $40 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 23,000 23,000 Units sold 18,000 20,000 + 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Direct materials Direct labor Variable manufacturing overhead Pixed manufacturing overhead ($437,000 + 23,000 units) Absorption costing unit product cost $ 9 10 2 19 $ 40 Production and cost data for the first two years of operations are: Units produced Units sold Year 1 23,000 18,000 Year 2 23,000 28,000 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using variable costing, what is the unit product cost for both years? Unit product cost Required Required 2 > Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($437,000+ 23,000 units) Absorption costing unit product cost $9 10 2 19 $40 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 23,000 23,000 Units sold 18.000 28,000 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, 5 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus sign.) Year 1 Yoar 2 Net operating income (loss) Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($437,000 - 23,000 units) Absorption costing unit product cost 10 2 19 $ 40 Production and cost data for the first two years of operations are: Units produced Units sold Year 1 23,000 18,000 Year 2 23,000 28,000 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Reconcile the absorption costing and the variable costing net operating income figures for each year. Reconellation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Variable costing net operating income (loss) Add (deduct) foxed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income Year 2
