Concept explainers
Variable Costing Income Statement; Reconciliation L07—2, L07—3
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows:
The company’s $18 unit product cost is computed as follows:
Forty percent of fixed manufacturing
Production and cost data for the first two years of operations are:
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 income figures for each year.
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Introduction To Managerial Accounting
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