Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Year 1 During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$62 per unit) Year

image text in transcribed

Year 1 During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$62 per unit) Year 2 $930,000 $1,550,000 Cost of goods sold (@ $38 per unit) Gross margin Selling and administrative expenses* 570,000 950,000 360,000 600,000 297,000 327,000 Net operating income. $ 63,000 $ 273,000 ok $3 per unit variable; $252,000 fixed each year. int rences The company's $38 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($260,000 +20,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Required: Year 1 Year 2 20,000 20,000 15,000 25,000 $ 9 13 3 13 $ 38 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 27 3. Reconcile the absorption costing and the variable costing net operating income figures for each year.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

9th Edition

978-0470317549, 9780470387085, 047031754X, 470387084, 978-0470533475

More Books

Students also viewed these Accounting questions