Problem 6-19 Variable Costing Income Statement; Reconciliation (LO6-2, LO6-3] During Heaton Companys first two years of operations, it reported absorption costing net operating income as follows: Sales ($64 per unit) Cost of goods sold $28 per unit) Grosis Selling and administrative expenses operating income Year 1 $ 1,152,000 504,000 648,000 302.000 346,000 2 $ 1,792,000 784,000 1,009,000 332,000 676,000 *$3 per unit variable; $ 248,000 fixed each year. The companys $28 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing $253,000+23 23,000 units) Absorption costing product cost Forty percent of fixed manufacturing overhead consists of wages and salarles remainder consists of depreciation charges

During Heaton Company's first two years of operations. It reported absorption costing net operating income as follows: Sales ( $64 per unit) Cost of goods sold ($28 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,152,000 504,000 648,000 302,000 $ 346,000 Year 2 $ 1,792,000 784,000 1,000,000 332,000 676,000 $ *$3 per unit variable: $248,000 fixed each year. The company's $28 unit product cost is computed as follows: $ 5 10 Direct materiale Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($253,000 + 23,000 units) Absorption costing unit product cost 11 $ 28 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: Units produced Units sold Year 1 23,000 18,000 Year 2 23,000 28,000 eBook 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. Print References Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the variable costing net operating income in Year 1 and in Year 27 (loss amounts should be indicated with a minus sign.) Year 1 Year 2 Net operating income (loss) eBook 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. Print ferences Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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 (lon) Year 2 Absorption costing net operating income