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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (862 per unit) Cost of goods sold t# $33 per unit) Gross margin $930,000 $1,550,000 495,000 625,000 435,000 725,000 Selling and administrative expenses 292,000 322,000 Set operating income $ 143,000 $403,000 $3 per unit variable: $247,000 fixed each year. The company's $33 unit product cost is computed as follows: Birpet materials Diret labor 10 Variable manufacturing overhead 13 Fised manufacturing overhead (5260,000 20,000 unita) Absorption costing unit product cost 5:33 Production and cost data for the first two years of operations are Year 1 Year 2 Units produced 20,000 20,000 thits sold 15,000 25,000 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 27 3. Reconcile the absorption costing and the variable costing net operating income figures for each year

During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (862 per unit) Cost of goods sold t# $33 per unit) Gross margin $930,000 $1,550,000 495,000 625,000 435,000 725,000 Selling and administrative expenses 292,000 322,000 Set operating income $ 143,000 $403,000 $3 per unit variable: $247,000 fixed each year. The company's $33 unit product cost is computed as follows: Birpet materials Diret labor 10 Variable manufacturing overhead 13 Fised manufacturing overhead (5260,000 20,000 unita) Absorption costing unit product cost 5:33 Production and cost data for the first two years of operations are Year 1 Year 2 Units produced 20,000 20,000 thits sold 15,000 25,000 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 27 3. Reconcile the absorption costing and the variable costing net operating income figures for each year

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 29P: Jellison Company had the following operating data for its first two years of operations: Jellison...
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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 (862 per unit) Year 2 $930,000 $1,550,000 495,000 Cost of goods sold t# $33 per unit) Gross margin 625,000 435,000 725,000 Selling and adninistrative expenses 292.000 322,000 Set operating income $ 143,000 $ 403,000 *$3 per unit variable: $247,000 fixed each year. The company's $33 unit product cost is computed as follows: Dirpet materials Diret labor Variable manufacturing overhead 3 13 Fixed manufacturing overhead (5260,000 20,000 unita) Absorption costing unit product cost Production and cost data for the first two years of operations are Year 1 Year 2 Units produced 20,000 20,000 thits sold 15,000 25,000 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 27 3. Reconcile the absorption costing and the variable costing net operating income figures for each year 5:33
Transcribed Image Text:During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Sales (862 per unit) Year 2 $930,000 $1,550,000 495,000 Cost of goods sold t# $33 per unit) Gross margin 625,000 435,000 725,000 Selling and adninistrative expenses 292.000 322,000 Set operating income $ 143,000 $ 403,000 *$3 per unit variable: $247,000 fixed each year. The company's $33 unit product cost is computed as follows: Dirpet materials Diret labor Variable manufacturing overhead 3 13 Fixed manufacturing overhead (5260,000 20,000 unita) Absorption costing unit product cost Production and cost data for the first two years of operations are Year 1 Year 2 Units produced 20,000 20,000 thits sold 15,000 25,000 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 27 3. Reconcile the absorption costing and the variable costing net operating income figures for each year 5:33
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