During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$62 per unit) Cost of goods sold (@$40 per unit) Gross margin Selling and administrative expenses* Net operating income $3 per unit variable; $249,000 fixed each year. The company's $40 unit product cost is computed as follows: Units produced Units sold Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($330,000+ 22,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 $ 1,054,000 $1,674,000 1,080,000 Year 1 22,000 17,000 Required 1 680,000 374,000 300,000 $ 74,000 Required 2 Required 3 Year 2 22,000 27,000 Required: 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. 594,000 330,000 $ 264,000 Complete this question by entering your answers in the tabs below. $7 13 5 15 $ 40 What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus sign.)
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$62 per unit) Cost of goods sold (@$40 per unit) Gross margin Selling and administrative expenses* Net operating income $3 per unit variable; $249,000 fixed each year. The company's $40 unit product cost is computed as follows: Units produced Units sold Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($330,000+ 22,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 $ 1,054,000 $1,674,000 1,080,000 Year 1 22,000 17,000 Required 1 680,000 374,000 300,000 $ 74,000 Required 2 Required 3 Year 2 22,000 27,000 Required: 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. 594,000 330,000 $ 264,000 Complete this question by entering your answers in the tabs below. $7 13 5 15 $ 40 What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus sign.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows:
Sales (@$62 per unit)
Cost of goods sold (@ $40 per unit)
Gross margin
Selling and administrative expenses*
Net operating income
*
$3 per unit variable; $249,000 fixed each year.
The company's $40 unit product cost is computed as follows:
Units produced
Units sold
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead ($330,000 22,000 units)
Absorption costing unit product cost
Production and cost data for the first two years of operations are:
Year 1
Year 2
$ 1,054,000 $ 1,674,000
1,080,000
594,000
330,000
$ 264,000
Year 1
22,000
17,000
Required 1
680,000
374,000
300,000
$ 74,000
Required 2
Required 3
Year 2
22,000
27,000
Required:
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.
$ 7
13
Complete this question by entering your answers in the tabs below.
5
15
$ 40
What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus
sign.)
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