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Variable Costing During Heaton Company's first two years operations , it reported absorption costing net operating income as follows : Sales ($ 62 per unit
Variable Costing During Heaton Company's first two years operations , it reported absorption costing net operating income as follows : Sales ($ 62 per unit Cost of goods sold ( $40 per unit ) Gross margin Selling and administrative expenses Net operating income Year 1 Year 2 992,000 1,612,000 640,000 1,040,000 352,000 572,000 299,000 329,000 $ 53,000 243,000 $ 3 per unit variable $ 251,000 fixea each year. The company's $ 40 unit product cost is computed as follows : $ 7 11 3 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (\$399,000+21 21,000 units) Absorption costing unit product cost 29 40 Production and cost data for the first two years of operations are: Units produced Units sold Year 1 21,000 16,000 Year 2 21,000 26,000 Required: 1. Using variable costing , what is the unit product cost for both years? What is the variable costing net operating income in Year 1 and in Year 2?
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