Exercise 7-9 Variable and Absorption Costing Unit Product Costs and Income Statements (L07-1, L07-2, LO7-3) Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations 27 10 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 $ $ $ $ 2 $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 $81 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 Complete this question by entering your answers in the tabs below. Reg 1A Reg 10 Reg 2A Reg 28 Reg 3 Assume the company uses variable costing. Compute the unit product cost for years and year 2. Year 2 Unit product cost Year 1 40 $ 40 Req 18 > d compute the unprELUSETU Tedl dnu real 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 Complete this question by entering your answers in the tabs below. Req 1A Req 18 Reg 2A Reg 2B Reg 3 Assume the company uses variable costing. Prepare an income statement for Year 1 and Year 2. Walsh Company Income Statement Year 1 Year 2 Sales $ 2.160,000f $ 2,700,000 Variable expenses 960,000 1,200,000 400,000 500,000 160.000 200.000 120.000 150.000 1.640,000 2,050,000 520.000 650.000 240.000 70,000 310,000 210,000 5 240.000 70,000 310,000 340.000 Net operating income (1055) $ ( Req1A Req2A > Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations 5 $ 27 10 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 $320,000 5.70,000 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 $81 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 Complete this question by entering your answers in the tabs below. Reg 1A Reg 18 Reg 2 Reg 20 Req Assume the company uses absorption conting Compute the unit product cost for Year 1 and Year 2. (Round your intermediate calculations and final answers to 2 decimal places.) Year 1 Yoar 2 Unit product cost 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 $81 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 Yean 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 Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2A Reg 28 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) Walsh Company Income Statement Year 1 Year 2 Net operating income (loss) $ 0 $ 0 Variable costs per uniti Manufacturing Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year Fixed manufacturing overhead Fixed selling and administrative expenses $ $ 5 5 27 10 3 $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 $81 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 Complete this question by entering your answers in the tabs below. Real Reg 18 Reg 2A Req 28 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.) Year 1 Year 2 Variable costing net operating income (los) Absorption costing net operating income (loss)
