During Heaton Company's first two years of operations, it reported absorption costing net operating income as follws:Year 2Sales (e $64 per unit)Cost of goods sold (e $37 per unit)Gross marginSelling and administrative expensesYear 1$ 1,152, 000 $ 1,792, 000666, 000486, 000301, 000$ 185, 0001,836, 000756, 000331, 000$ 425, 000Net operating incone•$3 per unit varlable, $247,000 fixed each year.The company's $37 unit product cost is computed as follows:Direct materialsDirect laborVariable manufacturing overheadFixed manufactüring overhead ($391, 00e + 23, 000 units)$ 6104.17$ 37Absorption costing unit product costProduction and cost data for the first two years of operations are:Units producedUnits soldYear 123, 00018, 000Year 223, 00028, 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

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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 $1,152, 000 S 1, 792, 000 666, 000 486, 000 301, 000 $ 185, 000 Year 2 Sales (e $64 per unit) Cost of goods sald (e $37 per unit) Gross margin Selling and administrative expenses 1, 636, 000 756, 000 331, 000 Net operating incoe $ 425, 000 * $3 per unit variable, $247,000 fixed each year The company's $37 unit product cost is computed as follows: Direct materials $ 6 10 Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($391, 00e+ 23, 000 units) 4. 17 $ 37 Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 23, 000 18, 000 Year 2 Units produced Units sold 23, 000 28, 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 27 3. Reconcile the absorption costing and the variable costing net operating income figures for each yeat

During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 $1,152, 000 S 1, 792, 000 666, 000 486, 000 301, 000 $ 185, 000 Year 2 Sales (e $64 per unit) Cost of goods sald (e $37 per unit) Gross margin Selling and administrative expenses 1, 636, 000 756, 000 331, 000 Net operating incoe $ 425, 000 * $3 per unit variable, $247,000 fixed each year The company's $37 unit product cost is computed as follows: Direct materials $ 6 10 Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($391, 00e+ 23, 000 units) 4. 17 $ 37 Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 23, 000 18, 000 Year 2 Units produced Units sold 23, 000 28, 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 27 3. Reconcile the absorption costing and the variable costing net operating income figures for each yeat

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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