During Heaton Company's first two years of operations, It reported absorption costing net operating income as follows: Year 1 Sales (@ $63 per unit) Cost of goods sold (@ $35 per unit) Gross margin Selling and administrative expenses* $ 1,008, 000 560, 000 448, 000 295, 000 Year 2 $1,638, 000 910, 000 728,000 325, 000 Net operating income 2$ 153, 000 2$ 403, 000 * $3 per unit variable; $247,000 fixed each year. The company's $35 unit product cost is computed as follows: $ 5 10 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($357, 000 + 21, 000 units) 3 17 $ 35 Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced Units sold 21, 000 16, 000 21, 000 26, 000 Required: 1. Using variable costing, what is the unit product cost for both years? Next > Prev 4 of 5

During Heaton Company's first two years of operations, It reported absorption costing net operating income as follows: Year 1 Sales (@ $63 per unit) Cost of goods sold (@ $35 per unit) Gross margin Selling and administrative expenses* $ 1,008, 000 560, 000 448, 000 295, 000 Year 2 $1,638, 000 910, 000 728,000 325, 000 Net operating income 2$ 153, 000 2$ 403, 000 * $3 per unit variable; $247,000 fixed each year. The company's $35 unit product cost is computed as follows: $ 5 10 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($357, 000 + 21, 000 units) 3 17 $ 35 Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced Units sold 21, 000 16, 000 21, 000 26, 000 Required: 1. Using variable costing, what is the unit product cost for both years? Next > Prev 4 of 5

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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