I have part of it completed. But I need help on the incorrect parts. Please help.
Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ $ $ $ 24 15 3 2 $240,000 $ 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 $59 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. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2A Req 2B Req3 Assume the company uses variable costing. Compute the unit product cost for year 1 and year 2. Year 1 42 Year 2 42 Unit product cost $ $ Req 1A Req 1B > Reg 1A Reg 1B Reg 2A Reg 2B Req3 Assume the company uses variable costing. Prepare an income statement for Year 1 and Year 2. Walsh Company Income Statement Year 2 Year 1 $ 2,950,000 Sales $ 2,360,000 Variable expenses: Variable cost of goods sold Variable selling and administrative 2,100,000 100,000 1,680,000 80,000 2,200,000 750,000 1,760,000 600,000 Total variable expenses Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expense 240,000 70,000 240,000 70,000 Total fixed expenses Net operating income (loss) 310,000 $ 440,000 310,000 290,000 $ Req 1A Reg 1B Reg 2A Reg 2B Reg 3 Assume the company uses absorption costing. Compute the unit product cost for Year 1 and Year 2. (Round your answer to 2 decimal places.) Year 1 Year 2 48.00 Unit product cost $ 46.80 Reg 1A Reg 1B Reg 2A Reg 2B Req3 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 Sales $ 2,360,000 Cost of goods sold 1,872,000 Gross margin 488,000 Selling and administrative expenses 150,000 Net operating income (loss) $ 338,000 Year 2 $ 2,950,000 2,388,000 562,000 170,000 $ 392,000 Req 1A Reg 1B Reg 2A Req 2B Req3 Reconcile the difference between variable costing and absorption costing net operating income in Year 1. (Enter any losses or deductions as a negative value.) Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income (loss) Year 1 Year 2 $ 440,000 $ 290,000 $ 30,000 (30,000) $ 410,000 $ 260,000
