Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Income Statements (Absorption Costing) Year 1 Year 2 Sales ($50 per unit) $ 1,350,000 $ 2,550,000 Cost of goods sold ($39 per unit) 1,053,000 1,989,000 Gross profit 297,000 561,000 Selling and administrative expenses 247,000 271,000 Income $ 50,000 $ 290,000 Additional Information Sales and production data for these first two years follow. Units Year 1 Year 2 Units produced 39,000 39,000 Units sold 27,000 51,000 Variable costs per unit and fixed costs per year are unchanged during these years. The company's $39 per unit product cost using absorption costing consists of the following. Direct materials $ 16 Direct labor 9 Variable overhead 5 Fixed overhead ($351,000/39,000 units) 9 Total product cost per unit $ 39 Selling and administrative expenses consist of the following. Selling and Administrative Expenses Year 1 Year 2 Variable selling and administrative ($1 per unit sold) $ 27,000 $ 51,000 Fixed selling and administrative 220,000 220,000 Total $ 247,000 $ 271,000 Required: Prepare income statements for each of these two years under variable costing. (Loss amounts should be entered with a minus sign.)

A company has a single product. The monthly data concerning the single product follows: Item Amount Selling Price per unit $200/unit Variable expenses per unit $80/unit Total Fixed Expenses $980,000 Units produced 10,000 units Units sold 10,000 units What is the current Operating Income given the above information?

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) $ 1,159,000 $ 1,769,000 Cost of goods sold (@ $34 per unit) 646,000 986,000 Gross margin 513,000 783,000 Selling and administrative expenses* 305,000 335,000 Net operating income $ 208,000 $ 448,000 * $3 per unit variable; $248,000 fixed each year. The company’s $34 unit product cost is computed as follows: Direct materials $ 7 Direct labor 13 Variable manufacturing overhead 2 Fixed manufacturing overhead ($288,000 ÷ 24,000 units) 12 Absorption costing unit product cost $ 34 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 operating income in Year 1 and in Year 2? 3. Reconcile the…

During Heaton Company’s first two years of operations, the company reported absorption costing net operating income as follows:      Year 1   Year 2 Sales (@ $61 per unit) $ 976,000     $ 1,586,000   Cost of goods sold (@ $34 per unit)   544,000       884,000   Gross margin   432,000       702,000   Selling and administrative expenses*   295,000       325,000   Net operating income $ 137,000     $ 377,000       * $3 per unit variable; $247,000 fixed each year.  The company’s $34 unit product cost is computed as follows:      Direct materials $ 6   Direct labor   8   Variable manufacturing overhead   2   Fixed manufacturing overhead ($378,000 ÷ 21,000 units)   18   Absorption costing unit product cost $ 34       Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consistsof depreciation charges on production equipment and buildings.  Production and cost data for the two years are:      Year 1   Year 2 Units…