Homework Help is Here – Start Your Trial Now!
Business
Accounting
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $ 1,159,000 $ 1,769,000 Sales (@ $61 per unit) Cost of goods sold (@ $36 per unit) 684,000 Gross margin 475,000 1,044,000 725,000 333,000 Selling and administrative expenses* 303,000 Net operating income $ 172,000 *$3 per unit variable; $246,000 fixed each year. The company's $36 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($288,000 ÷ 24,000 units) 12 Absorption costing unit product cost $36 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 24,000 24,000 Units sold 19,000 29,000 $ 392,000 $8 11 5 Required: 1. Using variable costing, what is the unit product cost for both years? Using variable costing, what is the unit product cost for both years? Unit product cost

During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $ 1,159,000 $ 1,769,000 Sales (@ $61 per unit) Cost of goods sold (@ $36 per unit) 684,000 Gross margin 475,000 1,044,000 725,000 333,000 Selling and administrative expenses* 303,000 Net operating income $ 172,000 *$3 per unit variable; $246,000 fixed each year. The company's $36 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($288,000 ÷ 24,000 units) 12 Absorption costing unit product cost $36 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 24,000 24,000 Units sold 19,000 29,000 $ 392,000 $8 11 5 Required: 1. Using variable costing, what is the unit product cost for both years? Using variable costing, what is the unit product cost for both years? Unit product cost

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
100%

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: Year 1 Year 2 $ 1,159,000 $ 1,769,000 Sales (@ $61 per unit) Cost of goods sold (@ $36 per unit) 684,000 Gross margin 475,000 Selling and administrative expenses* 303,000 Net operating income $ 172,000 *$3 per unit variable; $246,000 fixed each year. The company's $36 unit product cost is computed as follows: Direct materials Direct labor Show Transcribed Text 1,044,000 725,000 Net operating income (loss) 333,000 Variable manufacturing overhead Fixed manufacturing overhead ($288,000 ÷ 24,000 units) 12 Absorption costing unit product cost $36 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 24,000 24,000 Units sold 19,000 29,000 Required: 1. Using variable costing, what is the unit product cost for both years? Year 1 $ 392,000 Using variable costing, what is the unit product cost for both years? Unit product cost $8 Required 1 Required 2 Required 3 11 2. What is the variable costing net operating income in Year 1 and in Year 2? Required 1 Required 2 Required 3 What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus sign.) 5 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. 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 Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income Year 2
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 $ 1,159,000 $ 1,769,000 Sales (@ $61 per unit) Cost of goods sold (@ $36 per unit) 684,000 Gross margin 475,000 Selling and administrative expenses* 303,000 Net operating income $ 172,000 *$3 per unit variable; $246,000 fixed each year. The company's $36 unit product cost is computed as follows: Direct materials Direct labor Show Transcribed Text 1,044,000 725,000 Net operating income (loss) 333,000 Variable manufacturing overhead Fixed manufacturing overhead ($288,000 ÷ 24,000 units) 12 Absorption costing unit product cost $36 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 24,000 24,000 Units sold 19,000 29,000 Required: 1. Using variable costing, what is the unit product cost for both years? Year 1 $ 392,000 Using variable costing, what is the unit product cost for both years? Unit product cost $8 Required 1 Required 2 Required 3 11 2. What is the variable costing net operating income in Year 1 and in Year 2? Required 1 Required 2 Required 3 What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus sign.) 5 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. 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 Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income Year 2
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Financial Reporting in Hyperinflationary Economies
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS