Exercise 6-15 Absorption Costing Unit Product Cost and Income Statement (LO6-1, LO6-2] Chuck Wagon Grills, Inc., makes a single product-a handmade specialty barbecue grill that it sells for $215. Data for last year's operations follow: 10,100 9,000 1,100 62 35 Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Total fixed costs 11 19 127 $303,000 510,000 $813,000 Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one barbecue grill. 2. Assume that the company uses absorption costing. Prepare an income statement for last year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assume that the company uses absorption costing. Compute the unit product cost for one barbecue grill. Unit product cost Problem 6-19 Variable Costing Income Statement; Reconciliation (LO6-2, LO6-3) During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $63 per unit) Cost of goods sold (@ $44 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,134,000 792,000 342,000 305,000 $ 37,000 Year 2 $1,764,000 1,232,000 532,000 335,000 $ 197,000 * $3 per unit variable; $251,000 fixed each year. The company's $44 unit product cost is computed as follows: 17 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($ 460,000 + 23,000 units) Absorption costing unit product cost Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges or production equipment and buildings. 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