Hello,

Please see the data below. I am able to figure out everything for year 1, under absorbtion I get Absorbtion costing unit product cost of $283 and net operating income of $165,300. I am having trouble with year 2, and I am not sure where I am making a mistake because when I check my answers I am not getting the correct Net operating income for year 2. This is what info I have computed for year 2.

Compute the Ending Inventory
		Year 2
Units in beginning inventory		200
Units produced during the year		2600
Units sold during the year		2700
Units in ending inventory		100
Compute the Absorption Costing Unit Product Cost
		Year 2
Direct materials		147
Direct labor		61
Variable manufacturing overhead		23
Fixed manufacturing overhead		58 **
Absorption costing unit product cost		$289
Construct the Absorption Costing Income Statement
		Year 2
Sales		$1,020,600
Cost of goods sold		808,000 **
Gross margin		212,600
Selling and administrative expenses		91,200
Net operating income		121,400

** I think my problem may be my calculation for either fixed manufacturing overhead, or cost of goods sold. For fixed manufacturing over head I divided fixed manufacturing overhead per year by units sold produced during the year and for COGS I did units in beginning of inventory X absorbtion costing unit product cost of $283 (from year 1) + units produced during the year X absorbtion costing unit product cost of $289 (from year 2). Thank you!!

ORIGINAL DATA BELOW

Chapter 6: Applying Excel
Data
Selling price per unit	$50
Manufacturing costs:
Variable per unit produced:
Direct materials	$11
Direct labor	$6
Variable manufacturing overhead	$3
Fixed manufacturing overhead per year	$120,000
Selling and administrative expenses:
Variable per unit sold	$4
Fixed per year	$70,000
	Year 1	Year 2
Units in beginning inventory	0
Units produced during the year	10,000	6,000
Units sold during the year	8,000	8,000
Enter a formula into each of the cells marked with a ? below
Review Problem 1: Contrasting Variable and Absorption Costing
Compute the Ending Inventory
	Year 1	Year 2
Units in beginning inventory	0	?
Units produced during the year	?	?
Units sold during the year	?	?
Units in ending inventory	?	?
Compute the Absorption Costing Unit Product Cost
	Year 1	Year 2
Direct materials	?	?
Direct labor	?	?
Variable manufacturing overhead	?	?
Fixed manufacturing overhead	?	?
Absorption costing unit product cost	?	?
Construct the Absorption Costing Income Statement
	Year 1	Year 2
Sales	?	?
Cost of goods sold	?	?
Gross margin	?	?
Selling and administrative expenses	?	?
Net operating income	?	?
Compute the Variable Costing Unit Product Cost
	Year 1	Year 2
Direct materials	?	?
Direct labor	?	?
Variable manufacturing overhead	?	?
Variable costing unit product cost	?	?
Construct the Variable Costing Income Statement
	Year 1		Year 2
Sales		?		?
Variable expenses:
Variable cost of goods sold	?		?
Variable selling and administrative expenses	?	?	?	?
Contribution margin		?		?
Fixed expenses:
Fixed manufacturing overhead	?		?
Fixed selling and administrative expenses	?	?	?	?
Net operating income		?		?