Sales (20,000 units) Cost of sales: Direct materials Direct labor Variable overhead Fixed overhead Gross profit Operating expenses: Fixed Variable Income from operations $200,000 160.000 60.000 80.000 Gross profit Operating expenses: Fixed Variable Income from operations $ 12.000 40.000 The company's actual activity for the year follows: Sales (21,000 units) Cost of goods sold: Direct materials Direct labor Variable overhead Fixed overhead $231.000 168,000 73.500 77.500 $600,000 12.000 39.500 500.000 $100,000 52.000 $48.000 $651,000 550.000 $101.000 51.500 $ 49.500

Sales (20,000 units) Cost of sales: Direct materials Direct labor Variable overhead Fixed overhead Gross profit Operating expenses: Fixed Variable Income from operations $200,000 160.000 60.000 80.000 Gross profit Operating expenses: Fixed Variable Income from operations $ 12.000 40.000 The company's actual activity for the year follows: Sales (21,000 units) Cost of goods sold: Direct materials Direct labor Variable overhead Fixed overhead $231.000 168,000 73.500 77.500 $600,000 12.000 39.500 500.000 $100,000 52.000 $48.000 $651,000 550.000 $101.000 51.500 $ 49.500

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $64 per unit) $ 1,088,000 $ 1,728,000 Cost of goods sold (@ $35 per unit) 595,000 945,000 Gross margin 493,000 783,000 Selling and administrative expenses* 303,000 333,000 Net operating income $ 190,000 $ 450,000 * $3 per unit variable; $252,000 fixed each year. The company’s $35 unit product cost is computed as follows: Direct materials $ 8 Direct labor 12 Variable manufacturing overhead 2 Fixed manufacturing overhead ($286,000 ÷ 22,000 units) 13 Absorption costing unit product cost $ 35 Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings. Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced…
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 (@ $35 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $255,000 fixed each year. Year 1 $ 1,071,000 Year 2 $1,701,000 595,000 945,000 476,000 306,000 336,000 $170,000 $420,000 The company's $35 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($418,000 + 22,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: 756,000 $ 6 19 $ 35 Units produced Units sold Year 1 22,000 Year 2 22,000 17,000 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…
Mainely Lobster Income Statement Year Ended December 31, 2021 Sales $2,160,000 Cost of Goods Sold $640,000 $192,000 $320,000 Direct Materials Direct Labor Manufacturing Overhead Total Cost of Goods Sold 1,152.000 Gross Margin 1,008,000 Selling and Administrative Expenses Variable Selling expenses Fixed Selling expenses Total administrative expenses Total Selling and Administrative Expenses 224,000 250,000 160.000 634,000 Net Operating Income $ 374,000
Cahalane Corporation has provided the following data for its two most recent years of operation: Selling price per unit $ 91 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $ 12 Direct labor $ 5 Variable manufacturing overhead $ 5 Fixed manufacturing overhead per year $ 432,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $ 4 Fixed selling and administrative expense per year $ 78,000 Year 1 Year 2 Units in beginning inventory 0 1,000 Units produced during the year 9,000 12,000 Units sold during the year 8,000 10,000 Units in ending inventory 1,000 3,000 Which of the following statements is true for Year 2 The amount of fixed manufacturing overhead released from inventories is $592,000 The amount of fixed manufacturing overhead deferred in inventories is $592,000 The amount of fixed manufacturing overhead…
Assume the following information for a company that produced 10,000 units and sold 9,000 units during its first year of operations: Selling price Direct materials Direct labor Variable manufacturing overhead Sales commission Fixed manufacturing overhead Per Unit Per Year $ 200 $ 73 $ 50 $ 11 $ 8 $ 300,000 Using variable costing, what is the cost of the company's ending inventory?
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $61 per unit) $ 1,159,000 $ 1,769,000 Cost of goods sold (@ $34 per unit) 646,000 986,000 Gross margin 513,000 783,000 Selling and administrative expenses* 305,000 335,000 Net operating income $ 208,000 $ 448,000 * $3 per unit variable; $248,000 fixed each year. The company’s $34 unit product cost is computed as follows: Direct materials $ 7 Direct labor 13 Variable manufacturing overhead 2 Fixed manufacturing overhead ($288,000 ÷ 24,000 units) 12 Absorption costing unit product cost $ 34 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 24,000 24,000 Units sold 19,000 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…
During Heaton Company’s first two years of operations, the company reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $61 per unit) $ 976,000 $ 1,586,000 Cost of goods sold (@ $34 per unit) 544,000 884,000 Gross margin 432,000 702,000 Selling and administrative expenses* 295,000 325,000 Net operating income $ 137,000 $ 377,000 * $3 per unit variable; $247,000 fixed each year. The company’s $34 unit product cost is computed as follows: Direct materials $ 6 Direct labor 8 Variable manufacturing overhead 2 Fixed manufacturing overhead ($378,000 ÷ 21,000 units) 18 Absorption costing unit product cost $ 34 Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consistsof depreciation charges on production equipment and buildings. Production and cost data for the two years are: Year 1 Year 2 Units…
Neef Corporation has provided the following data for its two most recent years of operation: Selling price per unit $ 84 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $ 12 Direct labor $ 5 Variable manufacturing overhead $ 4 Fixed manufacturing overhead per year $ 432,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $ 5 Fixed selling and administrative expense per year $ 61,000 Year 1 Year 2 Units in beginning inventory 0 3,000 Units produced 12,000 9,000 Units sold 9,000 10,000 Units in ending inventory 3,000 2,0000 The net operating income (loss) under absorption costing in Year 2 is closest to: $75,000 $186,000 $136,000 $87,000
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $62 per unit) $ 1,178,000 $1,798,000 Cost of goods sold (@ $36 per unit) 684,000 1,044,000 Gross margin 494,000 754,000 Selling and administrative expenses * 305,000 335,000 Net operating income $ 189,000 $ 419,000 * $3 per unit variable; $248,000 fixed each year. The company's $36 unit product cost is computed as follows: Direct materials $ 9 Direct labor 10 Variable manufacturing overhead 4 Fixed manufacturing overhead ($312,000 - 24,000 units) 13 Absorption costing unit product cost $36 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 24,000 24,000 Units sold 19,000 29,000 Required: Using variable costing, what is the unit product cost for both years? What is the variable costing net operating income in Year 1 and in Year 2? Reconcile the absorption costing and the variable costing net operating…
b) Production and sales data of Industrial Detergents Ltd are given below: Production (liters) 70,000 Sales (liters) 55,000 nC udgeted financial data for activity level of 60,000 liters per period are as follOwS: Direct materials Cost per liter (¢) Direct labor 2. S0 3.00 Production overhead (200% of direct labor) 6.00 Total cost per liter 11.50 Selling price per liter 18.00 Administrative overheads are fixed at ¢100,000 per period and half of the production overheads are fixed. From the above information, prepare operating statements using marginal and absorplon principles.
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $61 per unit) $ 976,000 $ 1,586,000 Cost of goods sold (@ $38 per unit) 608,000 988,000 Gross margin 368,000 598,000 Selling and administrative expenses* 299,000 329,000 Net operating income $ 69,000 $ 269,000 * $3 per unit variable; $251,000 fixed each year. The company’s $38 unit product cost is computed as follows: Direct materials $ 7 Direct labor 12 Variable manufacturing overhead 4 Fixed manufacturing overhead ($315,000 ÷ 21,000 units) 15 Absorption costing unit product cost $ 38 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 21,000 21,000 Units sold 16,000 26,000 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.…
During Heaton Company's first two years of operations, It reported absorption costing net operating income as follows: Sales (e $63 per unit) Cost of goods sold (e $37 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,071,000 629,000 442,000 298,000 $ 144,000 Year 2 $ 1,701,000 999,000 702,000 328,000 $ 374,000 $3 per unit variable; $247,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($374,000 + 22,000 units) Absorption costing unit product cost $ 5 10 17 $ 37 Production and cost data for the first two years of operations are: Year 1 22,000 17,000 Year 2 Units produced Units sold 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…