During Heaton Company's first two years of operations, it reported absorption costing net operating Income as follows: Year 1 Year 2 $ 1,664, eee 1,04e, eee $ 1,024,e0e Sales (@ $64 per unit) Cost of goods sold (@ s4e per unit) Gross margin Selling and administrative expenses 640, 00e 384, eee 624, eee 298, eee 328,00e Net operating income 86,000 296, eee * 53 per unit variable; $250,000 fixed each year. The company's $40 unit product cost is computed as follows: Direct materials Direct labor 13 Variable manufacturing overhead Fixed manufacturing overhead ($336, eee + 21, eee units) 16 Absorption costing unit product cost $ 40 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 21, eee 21, eee Units sold 16, eee 26,ee0 Required: 1. Using varlable costing, what is the unit product cost for both years? 2 What is the varlable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the varlable 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 $ 1,664, eee 1,04e, eee $ 1,024,e0e Sales (@ $64 per unit) Cost of goods sold (@ s4e per unit) Gross margin Selling and administrative expenses 640, 00e 384, eee 624, eee 298, eee 328,00e Net operating income 86,000 296, eee * 53 per unit variable; $250,000 fixed each year. The company's $40 unit product cost is computed as follows: Direct materials Direct labor 13 Variable manufacturing overhead Fixed manufacturing overhead ($336, eee + 21, eee units) 16 Absorption costing unit product cost $ 40 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 21, eee 21, eee Units sold 16, eee 26,ee0 Required: 1. Using varlable costing, what is the unit product cost for both years? 2 What is the varlable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the varlable costing net operating income figures for each year.

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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