During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $63 per unit) Cost of goods sold (@ $33 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable; $247,000 fixed each year. The company's $33 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($288,000 ÷ 24,000 units) Absorption costing unit product Production and cost data for the first two years of operations are: Units produced Units sold Year 1 Year 2 $ 1,197,000 $1,827,000 627,000 570,000 304,000 $ 266,000 Year 1 24,000 19,000 Required 1 Required 2 Year 2 24,000 29,000 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. Required 3 Complete this question by entering your answers in the tabs below. 957,000 870,000 334,000 $ 536,000 Using variable costina, what is the unit product cost for both years? $8 10 3 12 $ 33 < Prev 3 of 3 ‒‒‒ # ▬▬▬▬▬▬ Next >
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $63 per unit) Cost of goods sold (@ $33 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable; $247,000 fixed each year. The company's $33 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($288,000 ÷ 24,000 units) Absorption costing unit product Production and cost data for the first two years of operations are: Units produced Units sold Year 1 Year 2 $ 1,197,000 $1,827,000 627,000 570,000 304,000 $ 266,000 Year 1 24,000 19,000 Required 1 Required 2 Year 2 24,000 29,000 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. Required 3 Complete this question by entering your answers in the tabs below. 957,000 870,000 334,000 $ 536,000 Using variable costina, what is the unit product cost for both years? $8 10 3 12 $ 33 < Prev 3 of 3 ‒‒‒ # ▬▬▬▬▬▬ Next >
Chapter1: Financial Statements And Business Decisions
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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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:
Year 1
$ 1,197,000
627,000
570,000
304,000
$ 266,000
Sales (@ $63 per unit)
Cost of goods sold (@ $33 per unit)
Gross margin
Selling and administrative expenses*
Net operating income
*
$3 per unit variable; $247,000 fixed each year.
The company's $33 unit product cost is computed as follows:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead ($288,000 ÷ 24,000 units)
Absorption costing unit product cost
Production and cost data for the first two years of operations are:
Units produced
Units sold
Year 1
24,000
19,000
Required 1
Required 2
Year 2
24,000
29,000
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.
Required 3
Year 2
$1,827,000
Complete this question by entering your answers in the tabs below.
957,000
870,000
334,000
$ 536,000
Using variable costina, what is the unit product cost for both years?
< Prev
$ 8
10
3
12
$ 33
3 of 3
Next >
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