During Heaton Company's first two years of operations, it reported absorption costing net operating income as...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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 (@ $37 per unit) Gross margin Selling and administrative expenses* Net operating income. * $3 per unit variable; $246,000 fixed each year. The company's $37 unit product cost is computed as follows: Year 1 Year 2 $ 1,220,000 $ 1,830,000 1,110,000 Units produced Units sold 740,000 480,000 306,000 $ 174,000 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($350,000 25,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 25,000 20,000 Year 2 25,000 30,000 720,000 336,000 $ 384,000 $7 13. 3 14 $ 37 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: Sales (@ $61 per unit) Cost of goods sold (@ $37 per unit) Gross margin Selling and administrative expenses* Net operating income. * $3 per unit variable; $246,000 fixed each year. The company's $37 unit product cost is computed as follows: Year 1 Year 2 $ 1,220,000 $ 1,830,000 1,110,000 Units produced Units sold 740,000 480,000 306,000 $ 174,000 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($350,000 25,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 25,000 20,000 Year 2 25,000 30,000 720,000 336,000 $ 384,000 $7 13. 3 14 $ 37 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.
Expert Answer:
Answer rating: 100% (QA)
To answer your questions well calculate the unit product cost and net operating income for both years using variable costing and then reconcile the ab... View the full answer
Related Book For
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
On March 1, 2025, Cullumber Company acquired real estate, on which it planned to construct a small offic building, by paying $87,000 in cash. An old warehouse on the property was demolished at a cost...
-
A simple random sample of size n, X, X2, and variance o. Consider the following estimators of = 0.5X + Xn is drawn from a population with mean n Xi i=2 and = n-1 Xi 2n Explain which estimator is...
-
During Heaton Company?s first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $63 per unit) $ 1,008,000 $ 1,638,000 Cost of goods sold...
-
JD is a 25 year old patient who sustained massive head trauma and neurological injury in a motorcycle accident. He is not brain dead, but after 4 weeks in MICU and several neuro consults, the...
-
1. Why is George concerned if the merger of St. Mark's and Cassid occurs? 2. What are the advantages and disadvantages for considering merging with the children's and university hospital? 3. What...
-
Consider the revised Coal Bank Hollow recycling problem discussed in section 5.5.4 of this chapter. We said that it is safest to assume the supply in a generalized network flow problem is capable of...
-
As a GAO auditor, you have been assigned to perform an audit of a Department of Education School Breakfast Program. The Department had instructed all schools to order commodities in economical...
-
Steve Murningham, manager of an electronics division, was considering an offer by Pat Sellers, manager of a sister division. Pats division was operating below capacity and had just been given an...
-
The police have a duty to maintain public order and prevent any violence from occurring. In this scenario, the police have received information that a group of potentially violent individuals are...
-
Amy Lloyd is interested in leasing a new car and has contacted three automobile dealers for pricing information. Each dealer offered Amy a closed-end 36 month lease with no down payment due at the...
-
Determine the following derivative. dy +sin 0=0, given y= when 0= 3. 4. 3. %3D de 3. 2.
-
Imagine you are working with another team to build an application. You are developing code that uses a class that the other team has not finished writing yet. You want to allow easy integration once...
-
What is the output of the following application? A. Honk(1)! B. Honk(3)! C. The code does not compile. D. The code compiles, but the output cannot be determined until runtime. E. None of the above....
-
What is the output of the InfiniteMath program? A. 2.0 B. 4.0 C. 8.0 D. The code does not compile. E. The code compiles but prints an exception at runtime. F. None of the above. class Math { public...
-
Which of the following are the best reasons for creating a default interface method? (Choose two.) A. Allow interface methods to be overloaded. B. Add backward compatibility to existing interfaces....
-
What is the output of the following application? A. 1 1 2 B. 5 2 2 C. 5 2 1 D. 6 2 2 E. 6 2 1 F. The code does not compile. package world; public class Matrix { private int level = 1; class Deep {...
-
A simple vapour compression plant produces 5 tonnes of refrigeration. The enthalpy values at inlet to compressor, at exit from the compressor, and at exit from the condenser are 183.19, 209.41 and...
-
B made an issue of 150,000 $1 ordinary shares at a premium of 20% the proceeds of which is received by cheque. What is the correct journal to record this? A. Bank Share capital Share premium B. Bank...
-
What is absorption costing?
-
What effect does an increase in the activity level have on a. Average fixed costs per unit? b. Variable costs per unit? c. Total fixed costs? d. Total variable costs?
-
Siegel Company manufactures a product that is available in both a deluxe model and a regular model. The company has manufactured the regular model for years. The deluxe model was introduced several...
-
Summarize PathGoal Leadership Theory. What theories of motivation can you tie to the assumptions of the model?
-
On a blank piece of paper, draw a picture of a leader. Once your picture is complete, answer the following questions: What does this picture say about you? What does this picture say about what...
-
Discuss the role of leadership style in response to employee maturity (development) as presented in the work of Hersey and Blanchard.
Study smarter with the SolutionInn App