Question
Walsh Company manufactures and sells one product. The following information pertains to each of the companys first two years of operations: Variable costs per unit:
Walsh Company manufactures and sells one product. The following information pertains to each of the companys first two years of operations: Variable costs per unit: Manufacturing: Direct materials $ 25 Direct labor $ 15 Variable manufacturing overhead $ 5 Variable selling and administrative $ 2 Fixed costs per year: Fixed manufacturing overhead $ 250,000 Fixed selling and administrative expenses $ 80,000 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 companys product is $60 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: a. 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.
a.
b.
so czta.meducation.com + c 52107-AX:1-700C MANGHINA CHOU-12-13 | Born I ghling, Ir., Warun-uly ... Chr. Muslin - Chapter 1 Hand - Connect Curing winn Cyk rews YRAK OF OPHTH. ICT Chapter 4 Hartwork 18.4/24 Total pairs awarded Help Edt 5 5 Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: 2.64.4 Dainis AWA Variable costs per unit: Manufacturing: Direct materials Direct laber Variable manufacturing overhead Variable selling and administrative Fixed costs per year! Fixed manufacturing overhead Fixed selling and administrative expenses s 5 S 25 15 5 2 Sex $ 250, POH S 38,808 cBook Frimt During its first year of operations, Walsh produced 50,000 units arc 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 560 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: a. Comoute 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. F Ferences Complete this question by entering your answers in the tabs below. Req1A Req1B Reg 2A Rec 20 Reg 3 Assume the company uses absorption costing. Prepare an Income statement for Year 1 and Year 2. (Round your intermediate calculations to 2 decimal places.) Walsh Company Income Statement Year 1 Direct materiale 25 $ Direcl labor * 15 Contribution margin 5 Manufacture overhead SX Nel operating income is) $ 0 $ Year 2 25 15 5 11) ( Roq ZA Reg 3 > MC Graw Hill so czta.meducation.com + c 52107-AX:1-700C MANGHINA CHOU-12-13 | Born I ghling, Ir., Warun-uly ... Chr. Muslin - Chapter 1 Hand - Connect Curing winn Cyk rews YRAK OF OPHTH. ICT Chapter 4 Hartwork 18.4/24 Total pairs awarded Help Edt 5 5 Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: 2.64.4 Dainis AWA Variable costs per unit: Manufacturing: Direct materials Direct laber Variable manufacturing overhead Variable selling and administrative Fixed costs per year! Fixed manufacturing overhead Fixed selling and administrative expenses s 5 S 25 15 5 2 Sex $ 250, POH S 38,808 cBook During its first year of operations, Walsh produced 50,000 units arc 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 S60 per unit Frimt F Ferences 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 uscs absorption costing: a. 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. Complete this question by entering your answers in the tabs below. Reg 14 Reg 1B Reg 2 Rec 2B Reg 3 Reconcile the difference between varlable costing and absorption costing net operating Income In Year 1. (Enter any losses or Ceductions as a negative value.) Variable costing at operating Income (6) Year 1 Year 2 $ 190,000$ 320,000 50,000 150.000 Absorption casting net operating in me s 240,0003 270,000Step by Step Solution
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