Ogilvy Company manufactures and sells one product. The following information pertains to each of the companys first three years of operations:

Variable cost per unit:
Direct materials	$	23
Fixed costs per year:
Direct labor	$	1,072,000
Fixed manufacturing overhead	$	850,000
Fixed selling and administrative expenses	$	248,000

The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Ogilvy produced 67,000 units and sold 67,000 units. During its second year of operations, it produced 67,000 units and sold 63,800 units. In its third year, Ogilvy produced 67,000 units and sold 70,200 units. The selling price of the companys product is $56 per unit.

Required:

1. Assume the company uses super-variable costing:

a. Compute the unit product cost for Year 1, Year 2, and Year 3.

b. Prepare an income statement for Year 1, Year 2, and Year 3.

2. Assume the company uses a variable costing system that assigns $16 of direct labor cost to each unit produced:

a. Compute the unit product cost for Year 1, Year 2, and Year 3.

b. Prepare an income statement for Year 1, Year 2, and Year 3.

3. Reconcile the difference between the super-variable costing and variable costing net operating incomes in Years 1, 2, and 3.

ork-Chapter 6 Saved Req 1A Req 1B Req 2A Req 2B Reg 3 Prepare an income statement for Year 1, Year 2, and Year 3. Assume the company uses super-variable costing. Ogilvy Company Super Variable Costing Income Statement Year Year 2 Sales 0 Variable cost of goods sold Contribution margin Fixed expenses Fixed manufacturing overhead Fixed selling and administrative Total fixed expenses Net operating income loss $ * Reg 14 Req 2A > 6 of 6 Next estaa Fact Pattern 2-1 Yos... DeepL Translator Chapter 6 Saved Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 2A Reg 2B Reg 3 Reconcile the difference between the super-variable costing and variable costing net operating incomes in Years 1, 2, and 3. Meat 2 Year 3 Super-variable costing net operating income (loss) Add: Direct labor deferred in inventory under variable costing Deduct: Direct labor released from inventory under variable costing Variable costing net operating income loss) 0 0 0 6 of 6 Next