During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $1,260,000 $1,890,000 580,000 680,000 307,000 $ 373,000 Sales ($63 per unit) Cost of goods sold ($29 per unit) Gross margin Selling and administrative expenses. Net operating income $3 per unit variable; $247,000 fixed each year. The company's $29 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($325,000 25,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 21 25,000 25,000 20,000 30,000 Units produced Units sold 870,000 1,020,000 337,000 $683,000 56 2 13 $29 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.

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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows:
Year 1
Year 2
$ 1,260,000 $1,890,000
580,000
680,000
307,000
$ 373,000
Sales ($63 per unit)
Cost of goods sold (@ $29 per unit)
Gross margin
Selling and administrative expenses
Net operating income.
*$3 per unit variable: $247,000 fixed each year.
The company's $29 unit product cost is computed as follows:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead ($325,000 25,000 units)
Absorption costing unit product cont
Production and cost data for the first two years of operations are:
Units produced
Units sold
Year 1
25,000
20,000
Year 2
25,000
30,000
870,000
1,020,000
337,000
$683,000
56
B
2
13
$29
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.
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 $ 1,260,000 $1,890,000 580,000 680,000 307,000 $ 373,000 Sales ($63 per unit) Cost of goods sold (@ $29 per unit) Gross margin Selling and administrative expenses Net operating income. *$3 per unit variable: $247,000 fixed each year. The company's $29 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($325,000 25,000 units) Absorption costing unit product cont Production and cost data for the first two years of operations are: Units produced Units sold Year 1 25,000 20,000 Year 2 25,000 30,000 870,000 1,020,000 337,000 $683,000 56 B 2 13 $29 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.
Units produced
Units sold
Year 1
25,000
20,000
Year 2
25,000
30,000
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.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Using variable costing, what is the unit product cost for both years?
Unit product cost
equinos
Required 2 >
Transcribed Image Text:Units produced Units sold Year 1 25,000 20,000 Year 2 25,000 30,000 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using variable costing, what is the unit product cost for both years? Unit product cost equinos Required 2 >
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