During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales ( $63 per unit) Cost of goods sold ( $40 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable: $249,000 fixed each year. The company's $40 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($475,000 25,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Year 1 25,000 20,000 Year 2 25,000 30,000 Year 1 Year 2 $ 1,260,000 $1,890,000 1,200,000 690,000 339,000 $ 351,000 $7 12 2 19 $40 800,000 460,000 309,000 $ 151,000 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: Sales ( $63 per unit) Cost of goods sold ( $40 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable: $249,000 fixed each year. The company's $40 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($475,000 25,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Year 1 25,000 20,000 Year 2 25,000 30,000 Year 1 Year 2 $ 1,260,000 $1,890,000 1,200,000 690,000 339,000 $ 351,000 $7 12 2 19 $40 800,000 460,000 309,000 $ 151,000 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.

Name: Please do not give solution in image format thanku During Heaton Compa
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Description: Please do not give solution in image format thanku During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows:Sales ( $63 per unit)Cost of goods sold ($40 per unit)Gross marginSelling and adm

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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