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1 200334 During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 2 $ 1,920,000 Sales (@164 per unit) Cost of goods sold (@ 530 per unit) Gross margin Selling and adeinistrative expenses Net operating income *$3 per unit variable, $250.000 fixed each year The company's $30 unit product cost is computed as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($200,000 25,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are Units produced Deits sold Year 1 25,000 20,000 Year 2 25,000 30,000 Required: 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 ond in Year 2? 4. Pe $6 19 $.30 Year $1,280,000 600,000 680,000 310,000 $ 370,000 900,000 1,020,000 340,000 $ 680,000

1 200334 During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 2 $ 1,920,000 Sales (@164 per unit) Cost of goods sold (@ 530 per unit) Gross margin Selling and adeinistrative expenses Net operating income *$3 per unit variable, $250.000 fixed each year The company's $30 unit product cost is computed as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($200,000 25,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are Units produced Deits sold Year 1 25,000 20,000 Year 2 25,000 30,000 Required: 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 ond in Year 2? 4. Pe $6 19 $.30 Year $1,280,000 600,000 680,000 310,000 $ 370,000 900,000 1,020,000 340,000 $ 680,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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1 00:53:43 During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 11 $1,280,000 600,000 680,000 310,000 $ 370,000 Sales (@164 per unit) Cost of goods sold (@ 530 per unit), Gross margin Selling and administrative expenses Net operating income *$3 per unit variable, $250.000 fixed each year. The company's $30 unit product cost is computed as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($300,000 25,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations ore Year 2 25,000 30,000 Units produced Deits sold Year 1 25,000 20,000 $30 Year 2 $1,920,000 Required: 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 2? 3 Reconcile the absorption costing and the variable costing net operating income figures for each 900,000 1,020,000 340,000 $ 680,000
Transcribed Image Text:1 00:53:43 During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 11 $1,280,000 600,000 680,000 310,000 $ 370,000 Sales (@164 per unit) Cost of goods sold (@ 530 per unit), Gross margin Selling and administrative expenses Net operating income *$3 per unit variable, $250.000 fixed each year. The company's $30 unit product cost is computed as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($300,000 25,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations ore Year 2 25,000 30,000 Units produced Deits sold Year 1 25,000 20,000 $30 Year 2 $1,920,000 Required: 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 2? 3 Reconcile the absorption costing and the variable costing net operating income figures for each 900,000 1,020,000 340,000 $ 680,000
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