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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 (@ $33 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable; $247,000 fixed each year. The company's $33 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($288,000 ÷ 24,000 units) Absorption costing unit product Production and cost data for the first two years of operations are: Units produced Units sold Year 1 Year 2 $ 1,197,000 $1,827,000 627,000 570,000 304,000 $ 266,000 Year 1 24,000 19,000 Required 1 Required 2 Year 2 24,000 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 absorption costing and the variable costing net operating income figures for each year. Required 3 Complete this question by entering your answers in the tabs below. 957,000 870,000 334,000 $ 536,000 Using variable costina, what is the unit product cost for both years? $8 10 3 12 $ 33 < Prev 3 of 3 ‒‒‒ # ▬▬▬▬▬▬ Next >

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 (@ $33 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable; $247,000 fixed each year. The company's $33 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($288,000 ÷ 24,000 units) Absorption costing unit product Production and cost data for the first two years of operations are: Units produced Units sold Year 1 Year 2 $ 1,197,000 $1,827,000 627,000 570,000 304,000 $ 266,000 Year 1 24,000 19,000 Required 1 Required 2 Year 2 24,000 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 absorption costing and the variable costing net operating income figures for each year. Required 3 Complete this question by entering your answers in the tabs below. 957,000 870,000 334,000 $ 536,000 Using variable costina, what is the unit product cost for both years? $8 10 3 12 $ 33 < Prev 3 of 3 ‒‒‒ # ▬▬▬▬▬▬ Next >

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
Section: Chapter Questions
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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 $ 1,197,000 627,000 570,000 304,000 $ 266,000 Sales (@ $63 per unit) Cost of goods sold (@ $33 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $247,000 fixed each year. The company's $33 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($288,000 ÷ 24,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Year 1 24,000 19,000 Required 1 Required 2 Year 2 24,000 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 absorption costing and the variable costing net operating income figures for each year. Required 3 Year 2 $1,827,000 Complete this question by entering your answers in the tabs below. 957,000 870,000 334,000 $ 536,000 Using variable costina, what is the unit product cost for both years? < Prev $ 8 10 3 12 $ 33 3 of 3 Next >
Transcribed Image Text:During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 $ 1,197,000 627,000 570,000 304,000 $ 266,000 Sales (@ $63 per unit) Cost of goods sold (@ $33 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $247,000 fixed each year. The company's $33 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($288,000 ÷ 24,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Year 1 24,000 19,000 Required 1 Required 2 Year 2 24,000 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 absorption costing and the variable costing net operating income figures for each year. Required 3 Year 2 $1,827,000 Complete this question by entering your answers in the tabs below. 957,000 870,000 334,000 $ 536,000 Using variable costina, what is the unit product cost for both years? < Prev $ 8 10 3 12 $ 33 3 of 3 Next >
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