None Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the yearfollows:Whitman CompanyIncome StatementSales (38,000 units x $44.60 per unit)Cost of goods sold (38,000 units × $24 per unit)Gross marginSelling and administrative expensesNet operating income$ 1,694,800912,000782,800475,000$ 307,800The company's selling and administrative expenses consist of $285,000 per year in fixed expenses and $5 per unit sold in variableexpenses. The $24 unit product cost given above is computed as follows:Variable manufacturing overheadDirect materials$ 10Direct labor44Fixed manufacturing overhead ($294,000 ÷ 49,000 units)6$ 24Absorption costing unit product costRequired:1. Redo the company's income statement in the contribution format using variable costing.2. Reconcile any difference between the net operating income on your variable costing income statement and the net operatingincome on the absorption costing income statement above.Complete this question by entering your answers in the tabs below.Required 1Required 2Redo the company's income statement in the contribution format using variable costing.

Lets understand the basics.Entity follows two type of costing system.(1) Variable costing(2)…

Answered: Whitman Company Income Statement 8,000…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter26: Manufacturing Accounting: The Job Order Cost System

Section: Chapter Questions

Problem 1CP

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During the current year, Sokowski Manufacturing earned income of $350,000 from total sales of $5,500,000 and average capital assets of $12,000,000. A. Based on this information, calculate asset turnover. B. Using the sales margin from the previous exercise, what is the total ROI for the company during the current year?
Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (42,000 units x $43.60 per unit) Cost of goods sold (42,000 units x $23 per unit) Gross margin Selling and administrative expenses Net operating income $ 1,831, 200 966,000 865,200 483,000 $ 382,200 The company's selling and administrative expenses consist of $315,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $23 unit product cost given above is computed as follows: Direct materials. Direct labor $ 10 4 Variable manufacturing overhead 3 Fixed manufacturing overhead ($276,000 46,000 units) 6 Absorption costing unit product cost $ 23 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption…
Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (39,000 units x $42.60 per unit) Cost of goods sold (39,000 units × $25 per unit) Gross margin Selling and administrative expenses Net operating income $ 1,661,400 975,000 686,400 487,500 $ 198,900 The company's selling and administrative expenses consist of $292,500 per year in fixed expenses and $5 per unit sold in variable expenses. The $25 unit product cost given above is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($240,000 ÷ 48,000 units) Absorption costing unit product cost $11 5 4 5 $ 25 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption…
Whitman Company has just completed its first year of operations. The company’s absorption costing income statement for the year follows: Whitman CompanyIncome Statement Sales (39,000 units × $43.10 per unit) $ 1,680,900 Cost of goods sold (39,000 units × $24 per unit) 936,000 Gross margin 744,900 Selling and administrative expenses 448,500 Net operating income $ 296,400 The company’s selling and administrative expenses consist of $292,500 per year in fixed expenses and $4 per unit sold in variable expenses. The $24 unit product cost given above is computed as follows: Direct materials $ 12 Direct labor 4 Variable manufacturing overhead 3 Fixed manufacturing overhead ($255,000 ÷ 51,000 units) 5 Absorption costing unit product cost $ 24 Required: 1. Redo the company’s income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net…
Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (38,000 units x $44.60 per unit) Cost of goods sold (38,000 units × $24 per unit) Gross margin Selling and administrative expenses Net operating income $ 1,694,800 912,000 782,800 475,000 $ 307,800 The company's selling and administrative expenses consist of $285,000 per year in fixed expenses and $5 per unit sold in variable expenses. The $24 unit product cost given above is computed as follows: Direct materials Variable manufacturing overhead $ 10 Direct labor 4 4 Fixed manufacturing overhead ($294,000 ÷ 49,000 units) 6 $ 24 Absorption costing unit product cost Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption…
Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (40,000 units x $44.60 per unit) Cost of goods sold (40,000 units x $22 per unit) Gross margin Selling and administrative expenses Net operating income $ 1,784,000 880,000 904,000 460,000 $ 444,000 The company's selling and administrative expenses consist of $300,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $22 unit product cost given above is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($180,000 + 45,000 units) Absorption costing unit product cost Required: $ 10 5 3 4 $ 22 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption…
Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (39,000 units x $43.10 per unit) Cost of goods sold (39,000 units x $22 per unit) Gross margin Selling and administrative expenses $ 1,680,900 858,000 822,900 448,500 Net operating income $ 374,400 The company's selling and administrative expenses consist of $292,500 per year in fixed expenses and $4 per unit sold in variable expenses. The $22 unit product cost given above is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($255,000÷ 51,000 units) Absorption costing unit product cost $22 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income…
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…
Whitman Company has just completed its fi rst year of operations. The company’s absorption costing income statement for the year appears below: Whiteman CompanyIncome Statement Sales (35000 units)Rs.875,000 Cost of goods sold @ of Rs.16 per unit560,000 Gross Profit315,000 Selling and Administrative expenses280,000 Net operating income35,000 The company’s selling and administrative expenses consist of Rs.210,000 per year in fixed expenses and Rs.2 per unit sold in variable expenses. The Rs.16 per unit product cost given above is computed as follows:Direct MaterialsRs.5 Direct Labour6 Variable manufacturing overhead1 Fixed manufacturing overhead (Rs.160,000 ÷ 40,000 units)4 Absorption costing unit product cost16 Required: Redo the company’s income statement in the contribution format using variable costing. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement…
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…
Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (39,000 units x $42.10 per unit) Cost of goods sold (39,000 units x $23 per unit) Gross margin Selling and administrative expenses Net operating income The company's selling and administrative expenses consist of $292,500 per year in fixed expenses and $4 per unit sold in variable expenses. The $23 unit product cost given above is computed as follows: Direct materials. Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($306,000+ 51,000 units) Absorption costing unit product cost $ 1,641,900 897,000 744,900 448,500 $ 296,400 Required 1 Required 2 $10 4 3 6 $23 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on…
During Denton Company’s first two years of operations, the company reported absorption costing net operating income as follows:Year 1 Year 2Sales (@ $63 per unit) year 1$ 1,260,000 year 2 $ 1,890,000 Cost of goods sold (@ $35 per unit) year 1. $700,000 year 2.$1,050,000 Gross margin year 1$560,000 year 2 $840,000 Selling and administrative expenses*year 1 $312,000 year 2 $342,000 Net operating incomeyear 1$ 248,000 year 2$ 498,000 $3 per unit variable; $252,000 fixed each year.The company’s $35 unit product cost is computed as follows:Direct materials $ 7 Direct labor $8 Variable manufacturing overhead $3 Fixed manufacturing overhead ($425,000 ÷ 25,000 units) $17 Absorption costing unit product cost $ 35 Production and cost data for the two years are given below: Year 1 Year 2Units produced $25,000 $25,000Units sold. $20,000 $30,000 Prepare a variable costing contribution format income statement for each year. Reconcile the absorption costing and…

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