$3 per unit variable: $245,000 fixed each year. he company's $35/unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($336,000 - 21.000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: units produced Units sold Year 1 21,000 16,000 Year 21,000 26,000 Required 1 Required 2 14 RR Complete this question by entering your answers in the tabs below. 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 year. $6 9 4 Required 3 16 $35 Reconcile the absorption costing and the variabl costing net operating income figures for each year.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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$3 per unit variable: $245,000 fixed each year.
The company's $35 unit product cost is computed as follows:
Direct Materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead ($336,000 - 21.000 units)
Absorption costing unit product cost
Production and cost data for the first two years of operations are:
Whats produced
Units sold
INE9
21,000
16,000
Required 1
Complete this question by entering your answers in the tabs below.
year
21,000
26.000
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 year.
Required 2 Required 3
Reconciliation of Varia
Variable costing net operating income (loss)
Reconcile the absorption costing and the variable costing net operating income figures for each year.
Costing and Absorption Costing Net Operating Incomes
Year 1
Absorption costing net operating income
$6
9
4
Required 2
16
$35
HAN
Year 2
Saved](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faed3de54-433a-4da2-b51c-03cbeee1d515%2F5a61268e-386d-4ebf-85a7-9a974e393513%2Fhqwsyel.jpeg&w=3840&q=75)
![t
7
ences
Cost of goods sold (@$35 per unit)
Gross margin
Selling and administrative expenses*
Net operating income
Direct materials
Direct labor
*$3 per unit variable; $245,000 fixed each year.
The company's $35 unit product cost is computed as follows:
Variable manufacturing overhead
Fixed manufacturing overhead ($336,000+ 21,000 units)
Absorption costing unit product cost
Units produced
Units sold
Production and cost data for the first two years of operations are:
Year 1
21,000
16,000
Required 1
$
Year 2
21,000
26,000
Required 2
Net operating income (loss)
Complete this question by entering your answers in the tabs below.
560,000
464,000
293,000
171,000
Required 3
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 year.
Year 1
910,000
754,000
323,000
$ 431,000
Year 2
< Required 1
$
6
9
4
What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus
sign.)
16
$ 35
Saved
Required 3 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faed3de54-433a-4da2-b51c-03cbeee1d515%2F5a61268e-386d-4ebf-85a7-9a974e393513%2Fr3e7e6m_processed.jpeg&w=3840&q=75)
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