During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $ Sales (@ $61 per unit) 1,159,000 1,769,000 Cost of goods sold (@ $37 per 703,000 1,073,000 unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable: $245,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead 456,000 696,000 302,000 332,000 $ 154,000 $364,000 Units produced Units sold $7 10 1 19 $ 37 Fixed manufacturing overhead ($456,000 + 24,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 24,000 24,000 19,000 29,000 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.
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $ Sales (@ $61 per unit) 1,159,000 1,769,000 Cost of goods sold (@ $37 per 703,000 1,073,000 unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable: $245,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead 456,000 696,000 302,000 332,000 $ 154,000 $364,000 Units produced Units sold $7 10 1 19 $ 37 Fixed manufacturing overhead ($456,000 + 24,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 24,000 24,000 19,000 29,000 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![During Heaton Company's first two years of operations, It reported absorption costing net operating income as follows:
Year 1 Year 2
$
Sales (@ $61 per unit)
1,159,000 1,769,000
Cost of goods sold (@ $37 per 703,000 1,073,000
unit)
Gross margin
Selling and administrative
expenses*
Net operating income
*$3 per unit variable: $245,000 fixed each year.
The company's $37 unit product cost is computed as follows:
Direct materials
Direct labor
456,000 696,000
302,000
332,000
$ 154,000 $364,000
Units produced
Units sold
Variable manufacturing overhead
Fixed manufacturing overhead ($456,000+
24,000 units).
Absorption costing unit product cost
Production and cost data for the first two years of operations are:
Year 1 Year 2
24,000 24,000
19,000 29,000
$7
10
1
19
$37
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.
Complete this question by entering your answers in the tabs below.
Required Required Required
2
Using variable costing, what is the unit product cost for both years?
Unit product
cost
< Required 1
Required 2 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F306544d4-bfab-472e-b269-53a01660a688%2F1535b1af-72b0-4941-943c-5446829329dc%2F5igp2p_processed.jpeg&w=3840&q=75)
Transcribed Image Text:During Heaton Company's first two years of operations, It reported absorption costing net operating income as follows:
Year 1 Year 2
$
Sales (@ $61 per unit)
1,159,000 1,769,000
Cost of goods sold (@ $37 per 703,000 1,073,000
unit)
Gross margin
Selling and administrative
expenses*
Net operating income
*$3 per unit variable: $245,000 fixed each year.
The company's $37 unit product cost is computed as follows:
Direct materials
Direct labor
456,000 696,000
302,000
332,000
$ 154,000 $364,000
Units produced
Units sold
Variable manufacturing overhead
Fixed manufacturing overhead ($456,000+
24,000 units).
Absorption costing unit product cost
Production and cost data for the first two years of operations are:
Year 1 Year 2
24,000 24,000
19,000 29,000
$7
10
1
19
$37
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.
Complete this question by entering your answers in the tabs below.
Required Required Required
2
Using variable costing, what is the unit product cost for both years?
Unit product
cost
< Required 1
Required 2 >
![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.
Complete this question by entering your answers in the tabs below.
Required Require Required
What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts
should be indicated with a minus sign.)
Year 1
Year 2
Net operating
income (loss)
< Required 1
Required 3 >
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.
Complete this question by entering your answers in the tabs below.
Required Required Required
2
3d
Reconcile the absorption costing and the variable costing net operating income figures for
each year.
Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes
Year 1
Year 2
Variable costing net operating income (loss)
Add (deduct) fixed manufacturing overhead deferred
from) inventory under absorption costing
Absorption costing net operating income
< Required 2
(released
Required 3](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F306544d4-bfab-472e-b269-53a01660a688%2F1535b1af-72b0-4941-943c-5446829329dc%2Fzor1lse_processed.png&w=3840&q=75)
Transcribed Image Text: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.
Complete this question by entering your answers in the tabs below.
Required Require Required
What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts
should be indicated with a minus sign.)
Year 1
Year 2
Net operating
income (loss)
< Required 1
Required 3 >
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.
Complete this question by entering your answers in the tabs below.
Required Required Required
2
3d
Reconcile the absorption costing and the variable costing net operating income figures for
each year.
Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes
Year 1
Year 2
Variable costing net operating income (loss)
Add (deduct) fixed manufacturing overhead deferred
from) inventory under absorption costing
Absorption costing net operating income
< Required 2
(released
Required 3
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