During Heaton Company's first two years of operations, It reported absorption costing net operating income as follows: Year 1 Sales (@ $63 per unit) Cost of goods sold (@ $35 per unit) Gross margin Selling and administrative expenses* $ 1,008, 000 560, 000 448, 000 295, 000 Year 2 $1,638, 000 910, 000 728,000 325, 000 Net operating income 2$ 153, 000 2$ 403, 000 * $3 per unit variable; $247,000 fixed each year. The company's $35 unit product cost is computed as follows: $ 5 10 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($357, 000 + 21, 000 units) 3 17 $ 35 Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 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 > Prev 4 of 5
During Heaton Company's first two years of operations, It reported absorption costing net operating income as follows: Year 1 Sales (@ $63 per unit) Cost of goods sold (@ $35 per unit) Gross margin Selling and administrative expenses* $ 1,008, 000 560, 000 448, 000 295, 000 Year 2 $1,638, 000 910, 000 728,000 325, 000 Net operating income 2$ 153, 000 2$ 403, 000 * $3 per unit variable; $247,000 fixed each year. The company's $35 unit product cost is computed as follows: $ 5 10 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($357, 000 + 21, 000 units) 3 17 $ 35 Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 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 > Prev 4 of 5
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,...
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Step 1 Introduction
VIEWStep 2 1) Statement showing the per unit product cost of both years by variable costing method
VIEWStep 3 1. Answer
VIEWStep 4 2) Computation of net operating income of both year
VIEWStep 5 3) Statement showing the reconciliation of the absorption costing and variable costing
VIEWStep 6 Working Notes
VIEWTrending now
This is a popular solution!
Step by step
Solved in 6 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning