Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation [LO,6-1, LO6-2, LO6-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $61 per unit) Cost of goods sold (@$36 per unit) Gross margin Selling and administrative expenses* Net operating income. *$3 per unit variable; $254,000 fixed each year. The company's $36 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing erhea ($336,000 24,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Required 1 Required 2 Unit product cost 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 1 Required 2 Complete this question by entering your answers in the tabs below. Required 3 Using variable costing, what is the unit product cost for both years? Net operating income (loss) Year 1 $ 1,159,000 684,000 475,000 311,000 $164,000 Required 1 Required 2 Year 1 24,000 19,000 Required 3 Year 1 Year 2 24,000 29,000 Required 3 Year 2 $ 1,769,000 1,044,000 What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus sign.) Year 2 725,000 341,000 $384,000 $6 12 4 14 $36
Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation [LO,6-1, LO6-2, LO6-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $61 per unit) Cost of goods sold (@$36 per unit) Gross margin Selling and administrative expenses* Net operating income. *$3 per unit variable; $254,000 fixed each year. The company's $36 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing erhea ($336,000 24,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Required 1 Required 2 Unit product cost 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 1 Required 2 Complete this question by entering your answers in the tabs below. Required 3 Using variable costing, what is the unit product cost for both years? Net operating income (loss) Year 1 $ 1,159,000 684,000 475,000 311,000 $164,000 Required 1 Required 2 Year 1 24,000 19,000 Required 3 Year 1 Year 2 24,000 29,000 Required 3 Year 2 $ 1,769,000 1,044,000 What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus sign.) Year 2 725,000 341,000 $384,000 $6 12 4 14 $36
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation [LO,6-1, LO6-2, LO6-3]
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows:
Sales (@ $61 per unit)
Cost of goods sold (@ $36 per unit)
Gross margin
Selling and administrative expenses*
Net operating income
$3 per unit variable; $254,000 fixed each year.
The company's $36 unit product cost is computed as follows:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead ($336,000 ÷ 24,000 units)
Absorption costing unit product cost
Production and cost data for the first two years of operations are:
Units produced
Units sold
Required 1
Unit product cost
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 2
Required 1
Complete this question by entering your answers in the tabs below.
Required 2
Using variable costing, what is the unit product cost for both years?
Required 3
Net operating income (loss)
Year 1
$ 1,159,000
684,000
475,000
311,000
$ 164,000
Required 1 Required 2
Year 1
24,000
19,000
Required 3
Year 1
Year 2
24,000
29,000
Required 3
What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus
sign.)
Year 2
$ 1,769,000
1,044,000
725,000
341,000
$ 384,000
Year 2
$ 6
12
4
14
$36
Reconcile the absorption costing and the variable costing net operating income figures for each year.
Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes
Year 1
Variable costing net operating income (loss)
Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under
absorption costing
Absorption costing net operating income
Year 2](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdc860f7d-8144-482b-af65-d08d28366106%2F933da630-50ee-43ab-af64-e8646633a86d%2Fzab3jg5_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation [LO,6-1, LO6-2, LO6-3]
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows:
Sales (@ $61 per unit)
Cost of goods sold (@ $36 per unit)
Gross margin
Selling and administrative expenses*
Net operating income
$3 per unit variable; $254,000 fixed each year.
The company's $36 unit product cost is computed as follows:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead ($336,000 ÷ 24,000 units)
Absorption costing unit product cost
Production and cost data for the first two years of operations are:
Units produced
Units sold
Required 1
Unit product cost
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 2
Required 1
Complete this question by entering your answers in the tabs below.
Required 2
Using variable costing, what is the unit product cost for both years?
Required 3
Net operating income (loss)
Year 1
$ 1,159,000
684,000
475,000
311,000
$ 164,000
Required 1 Required 2
Year 1
24,000
19,000
Required 3
Year 1
Year 2
24,000
29,000
Required 3
What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus
sign.)
Year 2
$ 1,769,000
1,044,000
725,000
341,000
$ 384,000
Year 2
$ 6
12
4
14
$36
Reconcile the absorption costing and the variable costing net operating income figures for each year.
Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes
Year 1
Variable costing net operating income (loss)
Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under
absorption costing
Absorption costing net operating income
Year 2
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