WalSl'l Company manufactures and sells one product. The following information pertains to each ofthe company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials 5 25 Direct labor $ 15 Variable manufacturing overhead $ 3 Variable selling and administrative S 2 Fixed costs per year: Fixed manufacturing overhead $240,868 Fixed selling and administrative expenses 3 88,868 I 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 $8? per unit. Required: i. assume the company uses variable costing: a. Compute the unit product cost for Year I 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. leerte this question by entering you- answers 'll tile tabs hebw. Reg 1A Reg 18 Reg ZA Reg 25 Reg 3 Reconcile tire difference between variable costing and absorption costing net operating income in Year 1. [Enter anyr losses or deductions as a negative value. Round your intermediate calculations to 2 decimal places.) 1rr'an'able costing net operating income {loss} _ _ Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Deduct Fixed manufacturing overhead cost released from inventory under absorption costing _ _ Absorption costing net operating income (loss) 1W'alsh Company manufactures and sells one product. The following information pertains to each ofthe company's rst two years of operations: variable costs per unit: Manufacturing: Direct materials 5 25 Direct labor 3 15 Variable manufacturing overhead 5 3 Variable selling and administrative E 2 Fixed costs per year: Fixed manufacturing overhead $240,000 Fixed selling and administrative expenses 3 88,908 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 $8? per unit. Required: 1. [Assume the company uses yariable costing: a. Compute the unit product cost for Year I and Year 2. b. Prepare an income statement for Year1 and Year 2. 2. Assume the company uses absorption costing: a. Compute the unit product cost for Year I and Year 2. lo. 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. CDIIIJIEIE lis queslion by entering you answers 'II the labs below. assume the company uses absorption costing. Prepare an income statement forYear l and Year 2. [Round your intermediate calculations to 2 decimal planes.) i was i 4.2mm comma and __
