d.What is the fixed overhead deferred under absorption costing in year 2?e.How do you reconcile the variable costing and absorption costing income figures for year 2?
Q: Whitman Company has just completed its first year of operations. The company’s absorption costing…
A: Income statement is a financial statement that shows profitability, total revenue and total…
Q: During Heaton Company’s first two years of operations, it reported absorption costing net operating…
A: Variable costs are costs that vary with the change in the level of output whereas fixed costs are…
Q: Walsh Company manufactures and sells one product. The following information pertains to each of the…
A: Solution Unit cost is the price incurred by a company to produce , store and sell one unit of a…
Q: Whitman Company has just completed its first year of operations. The company's absorption costing…
A: The income statement is prepared using different methods as variable and absorption costing. The…
Q: Direct materials $ 25 Direct labor $ 12 Variable manufacturing overhead $ 4 Variable selling and…
A: Breakeven unit refers to the total number of units of a product a company needs to sell in the…
Q: Haas Company manufactures and sells one product. The following Information pertains to each of the…
A: Under variable costing, the fixed manufacturing overhead does not form part of product costs.…
Q: Required: 1. Determine the manufacturing cost per unit for each of the products using the…
A: Activity based costing is a system of cost accounting which takes into consideration the number of…
Q: Whitman Company has just completed its first year of operations. The company’s absorption costing…
A: Lets understand the basics. Entity follows two type of costing system. (1) Variable costing (2)…
Q: Walsh Company manufactures and sells one product. The following information pertains to each of the…
A: Answer:- Using variable expenses soley in determining the product's overall costs is known as…
Q: $ 1,197,000 $ 1,827,000 Cost of goods sold (@ $41 per unit) 779,000 1,189,000 Gross margin…
A: Year 1 Year 2 Direct Material $ 7.00 $ 7.00 Direct labour $…
Q: Trez Company began operations this year. During this year, the company produced 100,000 units and…
A: The income statement includes all the revenue and expenses. The resulting amount after deducting…
Q: Suppose Grainy Day is considering discontinuing its tasty loops product line. Assume that during the…
A: Variable FixedCost of goods sold $ 38,40,000.00 $ 25,60,000.00 $ 64,00,000.00Operating…
Q: During Heaton Company’s first two years of operations, it reported absorption costing net operating…
A: Unit product cost refers to the cost incurred in factory for the production of goods. Under variable…
Q: Whitman Company has just completed its first year of operations. The company's absorption costing…
A: An income statement illustrates how costs—both fixed and variable—affect profit by displaying a…
Q: Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $188 per unit…
A: Dear student, check the answer in the explanation box below.Explanation:Dear student, I have…
Q: Godo Walsh Company manufactures and sells one product. The following information pertains to each…
A: The income statement is one of the various important financial statements of business. It tells the…
Q: During Heaton Company's first two years of operations, it reported absorption costing net operating…
A: Solution 1Computation of Unit Product cost - Heaton CompanyParticularsYear 1Year 2Direct…
Q: O'Brien Company manufactures and sells one product. The following information pertains to each of…
A: The income statement is prepared to record the revenue and expenses for the current period. The…
Q: How much will operating profits increase if Jasmine accepts the
A: While deciding whether to accept an order or not, fixed costs are ignored as they are to be incurred…
Q: cost per unit: curing: materials labour le manufacturing overhead e selling and administrative sts…
A: Break even point in units is the number of units sold at which the Sales revenue is equal to total…
Q: Whitman Company has just completed its first year of operations. The company’s absorption costing…
A: Variable costing is that costing system under which all variable manufacturing costs will be part of…
Q: Assume the following information for each of the first two years of operations for a company that…
A: As per Super-Variable Costing or Throughput costing, only Direct material cost is considered as…
Q: dams Company operates three segments. Income statements for the segments imply that profitability…
A: Comparative Income Statements - It Is a Part Of The Books Of a Company And Is Also Shows The…
Q: Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the…
A: The variable costing method is a method where only variable costs are taken into consideration…
Q: Walsh Company manufactures and sells one product. The following information pertains to the…
A: The variable costing system is the method which only the variable cost for determining the operating…
Q: Income Statement (Absorption Costing) Sales (80,000 units × $45 per unit) $ 3,600,000 Cost of…
A: Income statement refers to the financial record which reflect the total revenue generated by ac…
Q: O'Brien Company manufactures and sells one product. The following information pertains to each of…
A: Variable Costing method is a method where all the variable costs are used to calculate cost per…
Q: During Heaton Company’s first two years of operations, it reported absorption costing net operating…
A: Variable costing is a managerial accounting cost concept. Under this method, manufacturing overhead…
Q: During Heaton Company's first two years of operations, it reported absorption costing net operating…
A: The income statement can be prepared using different methods as variable and absorption costing. The…
Q: During Heaton Company’s first two years of operations, it reported absorption costing net operating…
A: Absorption costing and variable costing are defined as two method of calculating net profit. There…
Q: Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced…
A: An income statement is a financial report that indicates the revenue and expenses of a business. It…
Q: Whitman Company has just completed its first year of operations. The company's absorption costing…
A: The income statement in the contribution format is organised to divide expenses into fixed and…
Q: Darby Company, operating at full capacity, sold 131,600 units at a price of $126 per unit during the…
A: Variable cost Depends upon the production of goods or services that is increment of sales increases…
Q: Dowell Company produces a single product. Its income statements under absorption costing for its…
A: Variable Costing - Variable costing formula = Sales - Variable Costs - Fixed Cost = Operating Income…
Q: O’Brien Company manufactures and sells one product. The following information pertains to each of…
A: The income statement can be prepared using various methods as variable costing and absorption…
Q: Eastern Chemical Company produces three products. The operating results of the current year are:…
A: ABC costing provides a more accurate allocation of costs since it examines specific activities thT…
Q: Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced…
A: Lets understand the basics. Generally entity follow one of the two costing methods. (1) Variable…
Miller Company produces a single product. The company had the following results for its first two years of operation:
| year 1 | year 2 | |
| sales | 1,200,000 | 1,200,000 |
| cogs | 800,000 | 680,000 |
| gross margin | 400,000 | 520,000 |
| selling and admin expenses | 300,000 | 300,000 |
| Net Operating Income | 100,000 | 220,000 |
n Year 1, the company produced and sold 40,000 units of its only product; in Year 2, the company again sold 40,000 units, but increased production to 50,000 units. The company's variable production cost is P5 per unit and its fixed
d.What is the fixed overhead deferred under absorption costing in year 2?e.How do you reconcile the variable costing and absorption costing income figures for year 2?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Fairfax Inc. manufactures a small part that is widely used in various electronic products. Operating results for the first three years of operation are asoows: Year 1 Year 2 Year 3 Sales 800,000 672,000 CGS 600.000 504.000 Gross margin 200,000 168,000 Selling and admin. Expenses 200.000 184.000 Net operating income (loss) 0 (16,000) Production and sales data for the three year period were as follows: Year 1 Year 2 Year 3 50,000 50,000 45,000 Production units Sales units 50,000 42,000 50,000 Additional information: 1. The company plant is highly automated. Variable manufacturing costs total $3 per unit. The annual fixed manufacturing overhead is $450,000. 2. Variable selling and administrative expenses were 52 per unit sold. Annual fixed selling and administrative expenses totaled $100,000 annually. 3. The above costs stayed constant across the three years and the company uses a LIFO inventory flow assumption. Required: 1. Complete the traditional income statement above for year 3. 2.…Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 26 $ 13 $ 5 $ 3 $ 450,000 $ 210,000 During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company's product is $58 per unit. Required: 1. Compute the company's break-even point in unit sales. 2. Assume the company uses variable costing: a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. 3. Assume the company uses absorption costing:…Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 29 $ 15 $ 6 $ 5 $ 320,000 $ 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 company's product is $59 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…
- Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: $ 27 $ 11 $ 6 $ 5 Fixed manufacturing overhead Fixed selling and administrative expenses $ 320,000 $ 60,000 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 company's product is $55 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…Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $22 $12 $5 $4 $ 240,000 $ 60,000 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 company's product is $57 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 2Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable costs per unit: Manufacturing: $ 21 $ 13 $ 8 $ 1 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 600,000 $ 240,000 During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company's product is $57 per unit. Required: 1. Compute the company's break-even point in unit sales. 2. Assume the company uses variable costing: a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. 3. Assume the company uses absorption costing:…
- The Dorset Corporation produces and sells a single product. The following data refer to the year just completed: Beginning inventory 0Units produced 9,000Units sold 7,000Selling price per unit $ 47Selling and administrative expenses: Variable per unit $ 4Fixed per year $ 58,000Manufacturing costs: Direct materials cost per unit $ 10Direct labor cost per unit $ 6Variable manufacturing overhead cost per unit $ 5Fixed manufacturing overhead per year Assume that direct labor is a variable cost. $ 90,000Required: a. Prepare an income statement for the year using absorption costing b. Prepare an income statement for the year using variable costing c. Reconcile the absorption costing and variable costing net operating income figuresA manufacturing company, Exeter Corporation produces a single product with a selling price of$74 per unit, the following data regarding it’s operation in the current years is available : Units in Beginning Inventory in Year 1 0 unitsUnits produced in Year 1 23,000 unitsUnits sold in Year 1 19, 500 unitsUnits produced in Year 2 20,000 unitsUnits sold in Year 2 22,000 units Variable costs of the company during Year 1 operations :DM $33DL $11MOH $3.5Selling & Admin $8.70 Fixed costs of the company during Year 1 operations :Selling & Admin expenses $85,000Manufacturing Overheads $250,000 Variable costs of the company during Year 2 operations :DM $33.75DL $12MOH $3.5Selling & Admin $9Fixed costs of the company during Year 2 operations :Selling & Admin expenses $85,000Manufacturing Overheads $250,000 Required:a. Calculate the product cost per unit for Year 1 and Year 2, under the Absorption Costing System.A manufacturing company, Exeter Corporation produces a single product with a selling price of$74 per unit, the following data regarding it’s operation in the current years is available : Units in Beginning Inventory in Year 1 0 unitsUnits produced in Year 1 23,000 unitsUnits sold in Year 1 19, 500 unitsUnits produced in Year 2 20,000 unitsUnits sold in Year 2 22,000 units Variable costs of the company during Year 1 operations :DM $33DL $11MOH $3.5Selling & Admin $8.70 Fixed costs of the company during Year 1 operations :Selling & Admin expenses $85,000Manufacturing Overheads $250,000 Variable costs of the company during Year 2 operations :DM $33.75DL $12MOH $3.5Selling & Admin $9Fixed costs of the company during Year 2 operations :Selling & Admin expenses $85,000Manufacturing Overheads $250,000 Required:a. Calculate the product cost per unit for Year 1 and Year 2, under the Variable Costing System. b. Calculate the product cost per unit for Year 1 and Year 2, under the…
- Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: $ 24 $ 15 $ 6 $ 5 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 400,000 $ 70,000 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 company's product is $53 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…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 $54 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. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Req 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 Year 2 Sales $ 2,160,000r$ 2,700,000 Cost…A company produces two products. E and F in batches of 100 units. The production and cost data are: The company can only perform 12,000 set-ups each period yet there is unlimited demand for each product. What is the differential profit from producing product E instead of product F for the year? A. $216,000 B. $204,000 C. $12,000 D. $54,000
