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thumbs up immediately for correct answer Walsh Company manufactures and sellis one product. The following information pertains to each of the company's first two years
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Walsh Company manufactures and sellis one product. The following information pertains to each of the company's first two years of operations: Variable costs per units Manufacturing: Direct materials $ 25 Direct labor $ 16 Variable manufacturing overhead $ 6 Variable selling and administrative $ 5 Fixed costs per year: Fixed manufacturing overhead $ 240,000 Fixed selling and administrative expenses $ 100,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company's product is $53 per unit. Required: 1. Assume the company uses 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 absorption costing: 8. 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 variable costing and absorption costing net operating income in Year 1 Req 1A Req 1B Req 2A Req 2B Reg 3 Assume the company uses absorption costing. Prepare an Income statement for Year 1 and Year 2. calculations to 2 decimal places.) Walsh Company Income Statement Year 1 Year 2 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income (loss) $ 2,120,000 2,072,000 48,000 300,000 $ (252,000) $ 2,650,000 2,634,000 60,000 350,000 $ (290,000) Reg 1A Reg 1B Req 2A Reg 28 Reg 3 Reconcile the difference between variable costing and absorption costing net operating income in Year 1. (Enter any losses or deductions as a negative value.) Variable costing net operating income (loss) Add (deduct) foed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income foss) Year 1 Year 2 (300,000) s (290.000) 240,000 240,000 3 $ (60,000) S (50,000)
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