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 (@ $36 per unit) Gross margin Selling and administrative expenses* Net operating income $3 per unit variable; $248,000 fixed each year. The company's $36 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($345,000 ÷ 23,000 units) Absorption costing unit product cost $ 9 10 2 15 $ 36 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced Units sold 23,000 23,000 18,000 28,000 Required: Year 1 $ 1,152,000 648,000 Year 2 $ 1,792,000 1,008,000 504,000 302,000 $ 202,000 784,000 332,000 $ 452,000 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. Complete this question by entering your answers in the tabs below.

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 (@ $36 per unit) Gross margin Selling and administrative expenses* Net operating income $3 per unit variable; $248,000 fixed each year. The company's $36 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($345,000 ÷ 23,000 units) Absorption costing unit product cost $ 9 10 2 15 $ 36 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced Units sold 23,000 23,000 18,000 28,000 Required: Year 1 $ 1,152,000 648,000 Year 2 $ 1,792,000 1,008,000 504,000 302,000 $ 202,000 784,000 332,000 $ 452,000 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. Complete this question by entering your answers in the tabs below.

Name: During Heaton Company's first two years of operations, it reported ab
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Description: 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 (@ $36 per unit)Gross marginYear 1$ 1,152,000648,000504,000302,000$ 202,000Year 2$ 1,792,0

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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During Heaton Company's first two years of operations, It reported absorption costing net operating income as follows: Sales (e $63 per unit) Cost of goods sold (e $37 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,071,000 629,000 442,000 298,000 $ 144,000 Year 2 $ 1,701,000 999,000 702,000 328,000 $ 374,000 $3 per unit variable; $247,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($374,000 + 22,000 units) Absorption costing unit product cost $ 5 10 17 $ 37 Production and cost data for the first two years of operations are: Year 1 22,000 17,000 Year 2 Units produced Units sold 22,000 27,000 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…
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 2 Sales (@ $63 per unit) Cost of goods sold (@ $36 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,071,000 612,000 $ 1,701,000 972,000 459,000 302,000 729,000 332,000 $ 157,000 $ 397,000 * $3 per unit variable; $251,000 fixed each year. The company's $36 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($352,000 22,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Required: Year 1 Year 2 22,000 22,000 17,000 27,000 $5 11 4 16 $ 36 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…
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follws: Year 2 Sales (e $64 per unit) Cost of goods sold (e $37 per unit) Gross margin Selling and administrative expenses Year 1 $ 1,152, 000 $ 1,792, 000 666, 000 486, 000 301, 000 $ 185, 000 1,836, 000 756, 000 331, 000 $ 425, 000 Net operating incone •$3 per unit varlable, $247,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufactüring overhead ($391, 00e + 23, 000 units) $ 6 10 4. 17 $ 37 Absorption costing unit product cost 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 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…
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 (@ $35 per unit) Gross margin Selling and administrative expenses* Year 1 $1,008, 000 560, 000 448, 000 295, 000 Year 2 $1,638,000 910, 000 728,000 325, 000 2$ Net operating income $4 153, 000 403, 000 * $3 per unit variable; $247,000 fixed each year. The company's $35 unit product cost is computed as follows: $ 5 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($357, 000 + 21, 000 units) 10 17 $ 35 Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 2 Year 1 Units produced Units sold 21, 000 16, 000 21, 000 26, 000 Required: 1. Using variable costing, what is the unit product cost for both years? Next > 4 of 5 < Prev DELL
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales ($62 per unit) Cost of goods sold (@ $32 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,178,000 Year 2 $ 1,798,000 608,000 928,000 570,000 870,000 303,000 333,000 $ 267,000 537,000 * $3 per unit variable; $246,000 fixed each year. The company's $32 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 Required: Year 1 24,000 19,000 Year 2 24,000 29,000 12 832 $ 32 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…
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $61 per unit) $ 1,098,000 $ 1,708,000 Cost of goods sold (@ $38 per unit) 684,000 1,064,000 Gross margin 414,000 644,000 Selling and administrative expenses* 306,000 336,000 Net operating income $ 108,000 $ 308,000 * $3 per unit variable; $252,000 fixed each year. The company’s $38 unit product cost is computed as follows: Direct materials $ 6 Direct labor 9 Variable manufacturing overhead 3 Fixed manufacturing overhead ($460,000 ÷ 23,000 units) 20 Absorption costing unit product cost $ 38 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 23,000 23,000 Units sold 18,000 28,000 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net…
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) $ 1,197,000 $ 1,827,000 Cost of goods sold (@ $41 per unit) 779,000 1,189,000 Gross margin 418,000 638,000 Selling and administrative expenses* 305,000 335,000 Net operating income $ 113,000 $ 303,000 * $3 per unit variable; $248,000 fixed each year. The company’s $41 unit product cost is computed as follows: Direct materials $ 7 Direct labor 13 Variable manufacturing overhead 2 Fixed manufacturing overhead ($456,000 ÷ 24,000 units) 19 Absorption costing unit product cost $ 41 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 24,000 24,000 Units sold 19,000 29,000 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net…
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $62 per unit) $ 1,178,000 $1,798,000 Cost of goods sold (@ $36 per unit) 684,000 1,044,000 Gross margin 494,000 754,000 Selling and administrative expenses * 305,000 335,000 Net operating income $ 189,000 $ 419,000 * $3 per unit variable; $248,000 fixed each year. The company's $36 unit product cost is computed as follows: Direct materials $ 9 Direct labor 10 Variable manufacturing overhead 4 Fixed manufacturing overhead ($312,000 - 24,000 units) 13 Absorption costing unit product cost $36 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 24,000 24,000 Units sold 19,000 29,000 Required: Using variable costing, what is the unit product cost for both years? What is the variable costing net operating income in Year 1 and in Year 2? Reconcile the absorption costing and the variable costing net operating…