Question
Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costs per unit:Manufacturing:Direct
Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations:
Variable costs per unit:Manufacturing:Direct materials$29Direct labor$16Variable manufacturing overhead$6Variable selling and administrative$5Fixed costs per year:Fixed manufacturing overhead$320,000Fixed selling and administrative expenses$70,000
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 $58 per unit.
-Reconcile the difference between variable costing and absorption costing net operating income in year 1 and year 2.
My main questions is formula to calculate variable costing net operating income in the reconciliation.
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