Question
During Heaton Companys first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $60 per
During Heaton Companys first two years of operations, it reported absorption costing net operating income as follows:
Year 1 Year 2 Sales (@ $60 per unit) $ 1,080,000 $ 1,680,000 Cost of goods sold (@ $37 per unit) 666,000 1,036,000 Gross margin 414,000 644,000 Selling and administrative expenses* 307,000 337,000 Net operating income $ 107,000 $ 307,000
* $3 per unit variable; $253,000 fixed each year.
The companys $37 unit product cost is computed as follows:
Direct materials $ 7 Direct labor 10 Variable manufacturing overhead 3 Fixed manufacturing overhead ($391,000 23,000 units) 17 Absorption costing unit product cost $ 37
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.
- \$3 per unit variable; $253,000 fixed each year. The company's $37 unit product cost is computed as follows: Production and cost data for the first two years of operations are: 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? Absorption costing unit product cost Production and cost data for the first two years of operations are: 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 yeat Complete this question by entering your answers in the tabs below. Using variable costing, what is the unit product cost for both years? Production and cost data for the first two years of operations are: 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. What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus sign.) 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. Reconcile the absorption costing and the variable costing net operating income figures for each year
During Heaton Companys first two years of operations, it reported absorption costing net operating income as follows:
Year 1 | Year 2 | |
---|---|---|
Sales (@ $60 per unit) | $ 1,080,000 | $ 1,680,000 |
Cost of goods sold (@ $37 per unit) | 666,000 | 1,036,000 |
Gross margin | 414,000 | 644,000 |
Selling and administrative expenses* | 307,000 | 337,000 |
Net operating income | $ 107,000 | $ 307,000 |
* $3 per unit variable; $253,000 fixed each year.
The companys $37 unit product cost is computed as follows:
Direct materials | $ 7 |
---|---|
Direct labor | 10 |
Variable manufacturing overhead | 3 |
Fixed manufacturing overhead ($391,000 23,000 units) | 17 |
Absorption costing unit product cost | $ 37 |
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.
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