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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

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 54E: Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects...
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Production and cost data for the first two years of operations are: Year 1 21, 000 16, 000 Year 2 Units produced Units sold 21, 000 26, 000 Required: 1. Úsing 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. Required 1 Required 2 Required 3 What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus sign.) Year 1 Year 2 Net operating income (loss) < Required 1 Required 3 > 4 of 5 Next > < Prev
Transcribed Image Text:Production and cost data for the first two years of operations are: Year 1 21, 000 16, 000 Year 2 Units produced Units sold 21, 000 26, 000 Required: 1. Úsing 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. Required 1 Required 2 Required 3 What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus sign.) Year 1 Year 2 Net operating income (loss) < Required 1 Required 3 > 4 of 5 Next > < Prev
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
Transcribed Image Text: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
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