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 (@ $32 per unit)Gross marginSelling and administrative expenses*Net operating income.* $3 per unit variable; $254,000 fixed each year.The company's $32 unit product cost is computed as follows:Direct materialsDirect laborVariable manufacturing overheadFixed manufacturing overhead ($315,000 ÷ 21,000 units)Absorption costing unit product cost$ 69215$ 32Production and cost data for the first two years of operations are:Year 1Year 2Units produced21,00021,00016,00026,000Year 1$ 1,008,000512,000Year 2$ 1,638,000832,000496,000302,000806,000332,000$ 194,000$ 474,000Units soldRequired: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 1Required 2 Required 3Using variable costing, what is the unit product cost for both years?Unit product cost< Required 1Required 2>

Name: During Heaton Company's first two years of operations, it reported ab
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Description: 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 (@ $32 per unit)Gross marginSelling and administrative expenses*Net operating income.* $3 p

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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 (@ $32 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $254,000 fixed each year. The company's $32 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($315,000 + 21,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: $ 6 9 2 15 $ 32 Year 1 $ 1,008,000 512,000 Year 2 $ 1,638,000 832,000 496,000 302,000 $ 194,000 806,000 332,000 $ 474,000

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 (@ $32 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $254,000 fixed each year. The company's $32 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($315,000 + 21,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: $ 6 9 2 15 $ 32 Year 1 $ 1,008,000 512,000 Year 2 $ 1,638,000 832,000 496,000 302,000 $ 194,000 806,000 332,000 $ 474,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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