Question
The company's $43 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($425,000 + 25,000 units)
The company's $43 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($425,000 + 25,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 25,000 25,000 Units sold 20,000 30,000 Required: $ 10 12 4 17 $ 43 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.
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Managerial Accounting
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
12th Edition
978-0073526706, 9780073526706
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