Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation [LO,6-1, LO6-2, LO6-3) During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: 254 Sales ( 562 per unit) Cost of goods sold ( 536 per unit) Gross margin Selling and administrative expenses Net operating Income Years $1,116,000 60.000 450,000 303,000 $ 165,000 Year 2 $ 1,236,000 1,000,000 723,00 333.000 5 395.00 *$3 per unit variable: $249,000 foved each year. . The company's 536 unit product cost is computed as follows: ances 12 Direct materials Direct labor Variable manufacturing overhead Fixed ranufacturing overhead (5323,000 23,00 units) Absorption conting unit product cost 14 36 Production and cost data for the first two years of operations are wit produced Unis sold Y1 23.000 1,400 Year 2 23.000 20.000 Required: Using variable costing, what is the unit product cost for both years 2. What is the variable costing net operating income In Year 1 and in 24 3. Reconcile the absorption costing and the vantable costing net operating income figures for each year Complete this question by entering your answers in the tabs below. Required Regulied 2 Required *$3 per unit variable: $249,000 fixed each year The company's $36 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (5322,000 + 23,000 units) Absorption costing unit product cost $8 12 2 14 $36 Production and cost data for the first two years of operations are Units produced Units sold Year 1 23,000 18,000 Year 2 23,000 28,000 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the variable costing net operating income in Year 1 and In Year 27 (Loss amounts should be indicated with a minus sign) Year 1 Year 2 Net operating income (loss) Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($322,000 + 23,800 units) Absorption costing unit product cost $ 8 22 2 14 5 36 Production and cost data for the first two years of operations are: Units produced Units sold Year 1 23,000 18,000 Year 2 23,000 28,000 Required: 1. Using variable costing, what is the unt product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Reconcile the absorption costing and the variable costing net operating income figures for each year. Reconciliation of Variable Costing and Absorption Casting Net Operating incomes Year 1 Variable costing net operating income (1056) Year 2 Absorption costing net operating income
