During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows:Sales (@$60 per unit)Cost of goods sold (@ $41 per unit)Gross marginSelling and administrative expenses*Net operating income* $3 per unit variable; $246,000 fixed each year.The company's $41 unit product cost is computed as follows:Direct materialsDirect laborVariable manufacturing overheadFixed manufacturing overhead ($378,000 21,000 units)Absorption costing unit product cost$ 712418$ 41Production and cost data for the first two years of operations are:Year 1Year 2Units producedUnits sold21,00016,00021,00026,000Year 1$ 960,000656,000Year 2$ 1,560,0001,066,000304,000294,000$ 10,000494,000324,000$ 170,000Required: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 1 Required 2 Required 3Using variable costing, what is the unit product cost for both years?Unit product cost

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Description: During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows:Sales (@$60 per unit)Cost of goods sold (@ $41 per unit)Gross marginSelling and administrative expenses*Net operating income* $3 pe

The income statement can be prepared using different methods as variable and absorption costing. The…

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During Heaton Company's first two years of operations, it reported absorption costing net operating Income as follows: sales (@ $60 per unit) Cost of goods sold (@ $41 per unit) Gross margin selling and administrative expenses* Net operating income * $3 per unit variable: $246,000 fixed each year. The company's $41 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($378,000 + 21,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: $7 12 4 18 $ 41 Units produced Units sold Required: Year 1 Year 2 21,000 21,000 16,000 26,000 Year 1 $ 960,000 656,000 Year 2 $ 1,560,000 1,066,000 304,000 494,000 294,000 324,000 $ 10,000 $170,000 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 (@ $60 per unit) Cost of goods sold (@ $41 per unit) Gross margin selling and administrative expenses* Net operating income * $3 per unit variable: $246,000 fixed each year. The company's $41 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($378,000 + 21,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: $7 12 4 18 $ 41 Units produced Units sold Required: Year 1 Year 2 21,000 21,000 16,000 26,000 Year 1 $ 960,000 656,000 Year 2 $ 1,560,000 1,066,000 304,000 494,000 294,000 324,000 $ 10,000 $170,000 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.

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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Prepare an absorption-costing income statement for last year. Round to nearest whole number.
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