Kelly Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: 18.00 Variable cost per unit: Direct materials Fixed costs per year: Direct labor Fixed manufacturing overhead Fixed selling and administrative expenses $1,023,000 $ 570,000 $ 212,000 The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Kelly produced 66,000 units and sold 52,000 units. During its second year of operations, it produced 66,000 units and sold 80,000 units. The selling price of the company's product is $58 per unit. Required: 1. Assume the company uses super-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 a variable costing system that assigns $15.50 of direct labor cost to each unit produced: 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 the super-variable costing and variable costing net operating incomes in Years 1 and 2. Req 1A Req 1B Req 2A Req 2B Req3 Compute the unit product cost for Year 1 and Year 2. Assume the company uses super-variable costing. (Round your answers to 2 decimal places.) Unit Product Cost Year 1 Year 2 Req 1A Req 1B Req 2A Req 2B Reg 3 Prepare an income statement for Year 1 and Year 2. Assume the company uses super-variable costing. Kelly Company Super-Variable Costing Income Statement Year 1 Year 2 Fixed expenses: Total fixed expenses Net operating income (loss) Req 1A Req 1B Req 2A Req 2B Req 3 Compute the unit product cost for Year 1 and Year 2. Assume the company uses a variable costing system that assigns $15.50 of direct labor cost to each unit produced. (Round your answers to 2 decimal places.) Unit Product Cost Year 1 Year 2 Req 1A Req 1B Req 2A Req 2B Reg 3 Prepare an income statement for Year 1 and Year 2. Assume the company uses a variable costing system that assigns $15.50 of direct labor cost to each unit produced. (Round your intermediate calculations to 2 decimal places.) Kelly Company Variable Costing Income Statement Year 1 Year 2 Fixed expenses: Total fixed expenses Net operating income (loss) Req 1A Req 1B Req 2A Req 2B Req 3 Reconcile the difference between the super-variable costing and variable costing net operating incomes in Years 1 and 2. Year 1 Year 2 Super-variable costing net operating income (loss) Variable costing net operating income (loss)
