Answered step by step
Verified Expert Solution
Question
1 Approved Answer
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 2 $ 1,560,000 910,000 650,000 325,000 $
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 2 $ 1,560,000 910,000 650,000 325,000 $ 325,000 Sales (@$60 per unit) Cost of goods sold (@ $35 per unit) Gross margin Selling and administrative expenses* Net operating income $3 per unit variable; $247,000 fixed each year. The company's $35 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($294,000 + 21,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Required 1 Year 1 $ 960,000 560,000 400,000 295,000 $ 105,000 Year 1 21,000 16,000 Unit product cost 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. Required 2 Required 3 Year 2 21,000 26,000 Complete this question by entering your answers in the tabs below. $ 22 Using variable costing, what is the unit product cost for both years? $9 10 2 Required 1 14 $35 Required 2 >
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started