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Need help with answer. It fine if just showing answer but I also like show the work Problem 6-18 Variable Costing Income Statement; Reconciliation [LO2,
Need help with answer. It fine if just showing answer but I also like show the work
Problem 6-18 Variable Costing Income Statement; Reconciliation [LO2, LO3] During Denton Company's first two years of operations, the company reported absorption costing net operating income as follows: Year 1 Sales (@ $50 per unit) Cost of goods sold (@ $34 per unit) Year 2 $ $ 1,500,000 680,000 480,000 310,000 $ 1,020,000 320,000 Gross margin Selling and administrative expenses* Net operating income 1,000,000 340,000 10,000 $ 140,000 * $3 per unit variable; $250,000 fixed each year. The company's $34 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($350,000 25,000 units) $ 8 10 2 14 Absorption costing unit product cost $ 34 Production and cost data for the two years are given below: Units produced Units sold Year 1 25,000 20,000 Year 2 25,000 30,000 Required: 1. Prepare a variable costing contribution format income statement for each year. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.) Variable Costing Income Statement Year 1 Year 2 $ $ Variable expenses: Total variable expenses Fixed expenses: Total fixed expenses $ $ 2. Reconcile the absorption costing and variable costing net operating income figures for each year. (Loss amounts and amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Year 2 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) $ $Step by Step Solution
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