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What is the variable costing net operating income in Year 1 and in Year 2? During Heaton Company's first two years of operations, it reported
What is the variable costing net operating income in Year 1 and in Year 2?
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows Year 1 Year 2 Sales (G $64 per unit) Cost of goods sold (e $34 per unit) Gross margirn Selling and administrative expenses* Net operating income 1,024,000 544,000 480,000 301,000 S 1, 664,000 884, 000 780,000 331,000 $449,000 1179,000 *$3 per unit variable; $253,000 fixed each year The company's $34 unit product cost is computed as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($231,000 21,000 units) Absorption costing unit product cost 13 3 S 34 Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings Production and cost data for the first two years of operations are: Units produced Units sold Year 1 Year 2 21,000 21,000 16, 000 26, 000Step by Step Solution
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