During Heaton Company's first two years of operations, it reported absorption costing net operating income as...
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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 $ 1,134,000 $1,764,000 1,064,000 684,000 450,000 309,000 700,000 339,000 $ 141,000 $361,000 Sales (@ $63 per unit) Cost of goods sold (@ $38 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $255,000 fixed each year. The company's $38 unit product cost is computed as follows: Direct materials. Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($437,000 ÷ 23,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 23,000 18,000 Units produced Units sold Year 2 23,000 28,000 $8 || 19 $38 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. During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $ 1,134,000 $1,764,000 1,064,000 684,000 450,000 309,000 700,000 339,000 $ 141,000 $361,000 Sales (@ $63 per unit) Cost of goods sold (@ $38 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $255,000 fixed each year. The company's $38 unit product cost is computed as follows: Direct materials. Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($437,000 ÷ 23,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 23,000 18,000 Units produced Units sold Year 2 23,000 28,000 $8 || 19 $38 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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A Year 1 Direct materials Direct labor Variable manufacturing overhead 8 8 3 19 Year 2 Direct materi... View the full answer
Related Book For
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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